Britvic, and Irn-Bru owner AG Barr, will fight a watchdog's claims their merger will reduce competition in the drinks industry.
The proposed £1.4bn merger was referred to the Competition Commission after the Office of Fair Trading (OFT) expressed concern about the possibility of higher prices following the tie-up.
Last night's announcement from the OFT shocked Britvic's chairman Gerald Corbett, who said: "If this is industrial policy, I am a Frenchman. This is about two British companies getting together to take on Coca-Cola. The winners today are cracking open bottles of champagne at Coca-Cola in Atlanta, Georgia."
The OFT ruling means the merger deal between AG Barr and Britvic has lapsed.