Written by Scott Campbell.
Published at 15:09 GMT on Monday, 19th November 2012.
AG Barr and Britvic agree merger terms but 500 Cumbernauld jobs could be lost as IRN BRU manufacturers Barr move their factory to England


Picture is copyright of Bill Henry and is used on his courtesy.

CUMBERNAULD-BASED Scottish soft drinks manufacturers AG Barr have unveiled a £1.4 billion merger plan with English rival Britvic.

 

The merger of the two businesses has, however, brewed up criticism, as the creation one of Europe’s biggest soft drinks business could see up to 500 jobs cut.

 

The merger will see investors in Cumbernauld’s AG Barr own 37 per cent of the new entity, to be called Barr Britvic Soft Drinks. Shareholders in Britvic, whose products include J20 and Tango, will own 63 per cent of the enlarged group, a split in line with the stock market valuations of the two groups.

 

The companies said they believed they could shake £35 million of cost-saving synergies from the transaction in reduced overheads, procurement and supply chain efficiencies.

 

On the impact of job losses, predicted in Scotland on Sunday in September, a spokesperson for the companies said: “The directors of AG Barr and Britvic believe the net reduction in combined group headcount is likely to be in the range of 8 to 12 per cent.

 

“The number of employees and locations affected will depend on the outcome of the integration planning and these changes will only come into effect as synergies are realised over the three years post completion.”

 

Roger White, Chief Executive of AG Barr, who will take the same position in Barr Britvic Soft Drinks, would give no further details on the split of cost synergies or which jobs were under threat.

 

White said: “There will be 350 to 500 [job cuts] over a three-year horizon. We cannot say anything more specific [on various synergy issues] because we are reviewing, validating and updating multiple plans.” The groups’ combined headcount is currently about 4,000.

 

In addition, the companies said they expected to achieve revenue synergies of at least £5 million from combined distribution channels, brand portfolios and greater geographic presence in the UK.

 

Paul Moody, Britvic’s Chief Executive, who will leave the group towards the middle of 2013, said: “There is strong complementarity. AG Barr is strong in convenience stores, Britvic in groceries, pubs and clubs. Barr is stronger above the M62 [the trans-Pennines motorway], Britvic under the M62.”

 

The legal headquarters of the enlarged business will remain in Cumbernauld, while the operational HQ will be Britvic’s main centre in Hemel Hempstead, Hertfordshire.


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