THE Barr-Britic soft drinks deal that would have created a company to compete against bigger rivals has been called off. Where it leaves the two would-be partners is now up for debate.
AG Barr, maker of Irn-Bru, revealed yesterday that it had offered improved terms for Britvic but the latter’s board, emboldened by a new chief executive, a cost-cutting programme and a strategy to grow as a standalone company, said no.
It was not a big surprise, though there was a feeling that the duo could have found a way of sealing their £1.9 billion partnership following the Competition Commission’s approval earlier this week.
In the end, the commission and the Office of Fair Trading killed it off. Had the OFT not referred it in the first place the deal would be in the process of being finalised.
That decision in February was fiercely criticised by Britvic chairman Gerald Corbett, particularly the claim that the merger would lead the newly-combined company to raise prices.
Corbett now says conditions have changed and while it was expected to get a bigger slice and improved terms in a revised offer, AG Barr was clearly not prepared to offer enough to persuade him and his board to surrender their independence.
Both firms now feel confident enough that they can resist other predators. However, by trying for a second time Barr has shown it wants a merger partner and while hundreds of jobs in Scotland have been saved by the decision, the future remains a little uncertain.
Its problem is that acquisitions beyond mopping up smaller players are limited and the board will now feel pressure from shareholders it can do a deal or deliver growth organically.
Consumer benefits as watchdog refocuses
IT IS a hundred days, or thereabouts, since the new regulatory regime for the financial services industry came into being, and it would appear that the change of focus is being noticed and showing signs of making a difference.
Principally, the plan for the Financial Conduct Authority (FCA) in particular was to pay more attention to the end user – the consumer – and there is evidence of a more determined effort to do just that.
Monica Gogna, a partner specialising in financial services at law firm Pinsent Masons, rejects suggestions that the change of tack was some sort of populist measure and that quite rightly the man in the street is getting due attention.
Martin Wheatley, chief executive of the FCA, was told to be more invasive and to tell companies where he thought they were going wrong. It is a more proactive attempt at weeding out bad practice before it turns into a crisis.
The regulator has more surprisingly put the insurance industry under greater scrutiny, more so than the banking sector.
There was inevitably some scepticism that the new regulator would fall into the same traps as the one it replaced, the much-maligned Financial Services Authrority, but it has scored some early successes, particularly in relation to the mobile phone industry and in mounting raids.
It is said to be planning a further tightening in relation to compliance. It may mean more paperwork and supervision that smaller companies in particular will dislike, but if it helps clean up the industry it has to be a good thing.