Market Round-Up

German manufacturer, Volkswagen, has finalised a solid-state battery deal with QuantumScape, amid a backdrop of slumping Electric Vehicle (EV) sales. QuantumScape is a US start-up focused on electric battery technology development. It seeks to ‘revolutionize energy storage and power a decarbonized future’. 

Under the arrangement, Volkswagen, which already owns a 17% stake in QuantumScape, will have the licence to manufacture solid-state batteries based on the US firm’s technology. In exchange QuantumScape will receive royalty payments. The agreement enables Volkswagen to produce enough batteries to equip around 1M vehicles annually, with the option for this provision to be expanded in the future.

Solid-state batteries are seen as more powerful, compact and sustainable relative to their conventional lithium-ion counterparts. Since solid-state batteries can have a greater energy density, they could prove useful in increasing EV mileage, a key bugbear for current EV users. The two companies have cooperated on a previous joint battery venture in 2018, which the new deal replaces. 

Carlsberg is set to take over British drink maker, Britvic, in a deal valued at £3.3bn. This was Carlsberg’s third offer, with the previous two rejected by Britvic as they ‘significantly undervalued the business.’ Existing Britvic shareholders will receive £13.15 a share, £1.15 higher than the amount proposed in the first proposition. As a result, Britvic’s share price rallied by approximately 30% since the date of the first bid to around £12.60 at time of writing. 

The takeover will form a new combined entity called Carlsberg Britvic. Jacob Aarup-Andersen, Carlsberg CEO, believes that this new company will be a UK beverage “powerhouse,” owning flagship brands like Robinsons, J20, and San Miguel. The main motivation behind the move is a need for the Danish brewer to diversify away from traditional beers into other beverages like ready-to-drink cocktails and non-alcoholic drinks, as consumer preferences shift away from heavy alcohol consumption. 

Therefore, Britvic was an attractive takeover target. This was reinforced by the company’s exclusive licensing agreement with PepsiCo, enabling it to produce and distribute brands like Pepsi and 7up. Even though the deal has been accepted by the Britvic board, shareholders in the FTSE 250 company still need to approve it during a general meeting in the coming months. 

Please note that this communication is for information only and does not constitute a recommendation to buy or sell the investments mentioned. Investments and income arising from them can fall as well as rise in value. The information and views were correct at time of publication but may have changed at point of reading.