Scots HQ for new soft drinks giant

EUROPE’S BIGGEST soft drinks firm is to be headquartered in Cumbernauld following the agreement of a £1.4 billion merger deal between the makers of Irn-Bru and Robertsons squash.

AG Barr and Britvic yesterday announced that prolonged talks had finally borne fruit, with the tie-up set to create a new company with annual sales worth more than £1.5bn.

However, it is expected that around 500 jobs will be cut, as the financial assumptions behind the deal target a reduction of around 10% on a worker headcount of more than 4,000 people across the two firms.

Hertfordshire-based Britvic — whose brands include Robinsons, Fruit Shoot, R Whites and Tango — has about 3,300 staff. AG Barr, which dates to 1875 and produces Forfar-based Strathmore water as well as Tizer and Rubicon, has around 900 employees.

“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%,” the merger statement said.

“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.”

The tie-up, first disclosed by the companies in September, is expected to generate £40 million a year by 2016 through savings in overheads and buying costs, as well as in supply chain and distribution benefits.

It was previously revealed that Britvic shareholders would own 63% of the new company, to be called Barr Britvic Soft Drinks, with AG Barr holding the rest.

The deal, which is structured as a reverse takeover and will see Barr taking on all stock in Britvic, is still subject to shareholder approval.

AG Barr chief executive Roger White will lead the combined company, with former chairman of 31 years Robin Barr — one of only three people to know the formula of 32 ingredients used in Irn-Bru — sitting on the board as a non-executive director.

Britvic boss Paul Moody, who has led that company since 2003, will not switch to the combined company.

The f irm, which has suffered a challenging 2012 thanks to a recall of its popular Fruit Shoot children’s drinks after a new cap design was found to be faulty, will retain its operational base in Hemel Hempstead.

In contrast, the current Barr business has won praise for its performance after increasing sales of Irn-Bru away from heartlands in Scotland.

It’s thought that Barr’s plans for a new plant at Milton Keynes will be accelerated as part of the integration process.

AG Barr chief executive Roger White, who will lead the combined company.