AG Barr and Britvic stick by merger deal despite OFT ruling

Executives at AG Barr and Britvic, left reeling after the Office of Fair Trading’s decision to refer a proposed £1.4 million merger to the Competition Commission, have insisted they can demonstrate the deal would not lead to a substantial lessening of competition.

In a joint statement following the referral the companies said they intend to work together and alongside the commission during its investigation, which is expected to take six months.

Should clearance be given, the companies confirmed they would reconsider negotiating fresh terms on a new deal.

The current agreement will lapse during the commission’s probe.

While the firms’ boards said they continued to believe the coming-together was in the interests of both sets of shareholders and the benefits of a merger were unchanged, they warned there was no certainty or assurance any new proposal would be forthcoming.

Shares in both firms continued to fall yesterday. AG Barr closed down 13p at 502.5p. Britvic was down 30p at 390p.

Losses in the aftermath of the OFT decision late on Wednesday wiped a total of £150m off the value of the two companies in half an hour.