Soft drink maker Britvic has agreed terms for a sale to Carlsberg in a deal which values it at up to £4.1bn, and which is expected to be completed by the first quarter of 2025.

Britvic last month rejected a £3.1bn takeover move by the Danish brewing giant, with one of Britvic’s major investors, Aviva, telling Carlsberg to raise its bid.

The boards of Carlsberg and Britvic have now reached agreement on the terms of a recommended cash offer to acquire the entire issued and to-be-issued ordinary share capital of Britvic.

The acquisition values the entire issued and to-be-issued ordinary share capital of Britvic at approximately £3.3bn on a fully diluted basis and an implied enterprise value of approximately £4.1bn. Britvic shareholders would be entitled to receive 1,315 pence for each Britvic share. The Britvic directors, who have been advised by Morgan Stanley and Europa Partners, have said they consider the terms of the acquisition to be fair and reasonable.

Accordingly, they intend to recommend unanimously that Britvic shareholders vote in favour of the scheme. Carlsberg has today separately agreed to acquire Marston’s minority stake in Carlsberg Marston’s on the approval of Marston's shareholders as it intends to create a single integrated beverage company in the UK, to be named Carlsberg Britvic.

Carlsberg intends the enlarged business will “be able to take advantage of the highly synergistic relationship between beer and soft drinks, including within the areas of procurement, production, warehousing and distribution to increase efficiency and better serve customer needs”.

Carlsberg’s portfolio of soft drinks currently accounts for approximately 16% of total Carlsberg Group volumes and 27% of volumes in Western Europe. As Carlsberg has no local company presence in Ireland, it intends to retain Britvic Ireland on an as-is basis.

Carlsberg has formed a preliminary view that the integration of Britvic could deliver annual cost savings and efficiency improvements in the region of £100m (in the region of £75m on a post-tax basis), which Carlsberg expects to be delivered over the five years following completion of the acquisition.

The change follows the rebalancing of the Carlsberg Group after its exit from Russia and the anticipated completion of Britvic.

Ian Durant, non-executive chair of Britvic, said:

“The proposed transaction creates an enlarged international group that is well-placed to capture the growth opportunities in multiple drinks sectors. Crucially, to remain competitive at a time when the market is being shaped by the trend of increasing consolidation among bottling partners, Carlsberg’s agreement with PepsiCo provides the combined group with a strong platform for continued success.

The board of directors believe that the strategic merits of this offer are compelling, and the offer also provides shareholders with the opportunity to receive the certainty of cash consideration that reflects the current strength and medium-term prospects of the Britvic business.

It also recognises the challenges of achieving an appropriate future rating and valuation for Britvic versus its historical range of trading multiples, alongside less certain long-term alignment with regard to its PepsiCo bottling business.

Therefore, the board is unanimously recommending the offer to our shareholders.”

Jacob Aarup-Andersen, chief executive of Carlsberg, added:

“With this transaction, we are combining Britvic's high-quality soft drinks portfolio with Carlsberg's strong beer portfolio and route-to-market capabilities, creating an enhanced proposition across the UK and markets in Western Europe.

The proposed transaction is attractive for shareholders of Carlsberg, supporting our growth ambitions and being immediately earnings accretive and value accretive in year three.

We are excited about expanding our global partnership with PepsiCo and believe that the longer-term opportunities will be very beneficial for both companies.

We are pleased that the Britvic board is unanimously recommending our offer to Britvic shareholders. We look forward to welcoming Britvic’s employees into the Carlsberg family and creating an exciting, combined company for all employees.”

It comes as Britvic reported a strong third quarter of trading, with revenue growth in the UK up 6.6% on the prior year, with both the retail and hospitality channels in growth.