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Danish brewer Carlsberg (OTC:CABGY) said that PepsiCo Inc (NASDAQ:PEP) has agreed to waive a clause in its bottling agreement with Britvic (OTC:BTVCY) making the British company a more appealing acquisition target.
The development follows Britvic’s rejection of a $3.9 billion bid from Carlsberg, potentially paving the way for an increased offer.
The waiver will take effect if Britvic’s board recommends and completes an acquisition by Carlsberg, Reuters reported.
Britvic’s shares surged by 10% to a record high of 1,207 pence in London following the news. The move signals Carlsberg’s ongoing interest in acquiring the soft drinks manufacturer.
Carlsberg’s interest in Britvic is aimed at expanding its beverage portfolio, particularly its soft drinks segment. Britvic, known for its Robinsons and R. White’s brands, holds a significant presence in the U.K. market.
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Additionally, Britvic’s long-term franchise bottling agreement with PepsiCo, covering brands like Pepsi, 7UP, and Mountain Dew, adds value to the potential acquisition.
The change of control clause waiver provides enhanced protection for PepsiCo if Britvic’s ownership changes.
Carlsberg, which already bottles Pepsi products in markets like Norway and Sweden, stands to benefit from extending this partnership.
Carlsberg has until July 19 to make a formal offer for Britvic or withdraw. The Danish brewer is still assessing its position, with no certainty of an offer being made.
PepsiCo stock has lost more than 9% in the last 12 months. Investors can gain exposure to the stock via IShares U.S. Consumer Staples ETF (NYSE:IYK) and Consumer Staples Select Sector SPDR Fund (NYSE:XLP).
Price Action: PEP shares were trading higher by 1.07% at $169.07 at the last check on Monday.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
Photo by ja-san-miguel for Unspalsh
