Carlsberg buys Britvic as deal pushed by Gen-Z turning backs on booze

Carlsberg has bought soft drink giant Britvic for £3.3 billion in a move partly driven by Gen-Z turning their backs on booze.

Britvic produces popular beverages including J2O, Robinsons squash and Tango. 

The trend in younger people drinking less alcohol had at least partly influenced Carlsberg’s decision,its boss revealed last night.

Carlsberg Group chief executive Jacob Aarup-Andersen told The Sun: ‘Beer will still be our core product, but we are seeing a huge structural trend towards low and no-alcoholic drinks and that is a growth opportunity for us.’ 

It comes as rising numbers of Gen Z are turning their backs on booze – with 36% of under 25s being non-drinkers according to a recent survey. 

Two years ago, the number of 18 to 24-year-olds spurning alcohol stood at 24 per cent, while the overall figure for Britons on the wagon was just 13 per cent.

Some 16 per cent of Brits now identify as ‘flexi’ — switching between booze and non-alcoholic drinks — with 57 per cent describing themselves as drinkers, found ad firm Red Brick Road. 

However, some Gen Z Brits do drink, but 72 per cent claim they ‘fear’ boozing and 32 per cent say they drink less alcohol in comparison to last year, the survey found.

Hangovers, emotional distress, the soaring cost of a night out and unflattering photos of them drunk appearing on social media are some of the biggest concerns under-25s have about booze.

Britvic told shareholders yesterday morning it will recommend the latest deal of £4.1 billion with debts taken into account.

It comes after the previous offer of £3.1 billion was rejected.

Britvic makes beverages including Pepsi, 7up and Lipton iced tea in the UK – holding an exclusive licence with US partner PepsiCo.

Mr Aarup-Andersen said: ‘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 other markets in Western Europe.

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

Ian Durant, non-executive chairman of Britvic, said: ‘The proposed transaction creates an enlarged international group that is well-placed to capture the growth opportunities in multiple drinks sectors.

‘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.’

The Danish brewing giant is still making moves in the business of beer and ales after, in a separate deal yesterday, it also agreed to take control of its UK joint venture with Marston’s, the Carlsberg Marston’s Brewing Company, which makes brands including Hobgoblin and Pedigree.

There are no plans to move the production of the Britvic drinks or British ales abroad, Mr Aarup-Andersen told The Sun: ‘We are confident Brits will keep drinking our beer, which is, after all, probably the best in the world.’

Justin Platt, who became chief executive at Marston’s at the start of the year, said: ‘This deal further strengthens our balance sheet, significantly reducing our debt by over £200 million.

‘Crucially, it allows us to become a pure play hospitality business and focus on what we do best – namely, giving our guests amazing pub experiences.’

Carlsberg said it plans to create a single integrated drinks business called Carlsberg Britvic after completing the two deals.

MailOnline has contacted Carlsberg and Britvic for further comment.