The proposed merger of soft drinks manufacturers Britvic and A.G.Barr lost some of its fizz after the companies announced that the Competition Commission had opened an investigation.

The groups reported that the Office of Fair Trading had referred the merger to the Competition Commission due to concerns that a tie-up could reduce competition between certain brands of A.G. Barr and Britvic.

A statement issued by Britvic reported that both parties believed that "the merger will not result in a substantial lessening of competition and that they will be able to demonstrate this to the Competition Commission".

However, the probe represents a major set-back for the drinks makers, which previously announced that the effective date of the merger would be February 26th.

The investigation could take six months and after that both companies said there was no longer a guarantee the tie-up would even go ahead.

A statement from Britvic read: "The Competition Commission's investigation is expected to take approximately six months. If clearance is received from the Competition Commission on terms satisfactory to both A.G. Barr and Britvic, the boards of A.G. Barr and Britvic will each reconsider, at that time, the terms of a possible merger between A.G. Barr and Britvic.

"There can be no certainty or assurance that, following such clearance, any such merger would be forthcoming or that any offer will be made by either A.G. Barr or Britvic".

Britvic's brands include Robinsons, Fruit Shoot, R Whites and Tabngo. A.G.Barr's brands include Irn Bru, Tizer and Rubicon.

Britvic's share price was down 8.26% to 385.30p at 11:26 on Thursday.

MF

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