LONDON British soft drinks maker Britvic Plc (BVIC.L) played down the chances of resurrecting merger talks with smaller rival A.G. Barr Plc (BAG.L), after the proposed deal was finally given the blessing of the competition watchdog.
Irn Bru-maker A.G. Barr and Britvic, behind the Robinsons and Tango brands, had agreed an all-share merger in November, which lapsed in February when the Competition Commission launched its investigation.
That gave Britvic time to unveil its own self-help plan to cut costs and further expand overseas.
"Our company is in a different place to last summer when the terms of the merger were agreed," Britvic Chairman Gerald Corbett said in a statement on Tuesday.
"The cost savings from merging are less, we are performing better, we have new management and we have a new strategy to deliver good growth internationally as well as in the UK."
One industry source familiar with the deal said that, given the changes at Britvic, he would be "very surprised" if the merger went ahead.
That view was in contrast to upbeat Barr comments welcoming the regulatory clearance as a "positive step" and arguing the deal's strategic rationale remained.
Shares in Britvic closed down 3 percent while Barr shares fell 1 percent.
A combination of the two companies, which both date back to the 19th century, would create one of Europe's biggest drinks groups, bringing together the fizzy orange Irn-Bru dubbed Scotland's national drink and Britvic's brands which also include J2O and Fruit Shoot.
RISE IN VALUE
Under the original terms, investors in Britvic would have owned 63 percent of the combined group, while Barr shareholders would have owned the rest. The head of the smaller firm, Roger White, was due to lead the new group.
Based on current market values, the two together would be worth 1.8 billion pounds, compared with 1.3 billion when talks first emerged last year.
The rise in value has partly been driven by Britvic's push under new Chief Executive Simon Litherland to cut costs and expand in the United States, Spain and India, all moves designed to strengthen its position regardless of whether the deal was allowed to go ahead.
The appointment of Litherland at Britvic, which was formed by a chemist to make homemade soft rinks, followed a rocky couple of years, marred by a recall of Fruit Shoot drinks due to faulty caps and inconsistent trading.
Barr's White told Reuters he was focused on his own company's position and would not engage in tit-for-tat talks, adding "it's up to them to say what they think".
"From our point of view we didn't need to do this deal last year (and) we don't need to do this deal this year to be a continuing successful, strong, independent business," White said.
"We can still see the strategic logic, the same as it was three or four months ago," White added. "There's going to be lots of speculation driven by lots of words of wisdom today, but we are not going to get involved."
White declined to comment on speculation the firm could alternatively be interested in buying the Lucozade and Ribena brands being sold by GlaxoSmithKline (GSK.L), which could fetch more than 1 billion pounds.
(Editing by Paul Sandle and David Holmes)