GlaxoSmithKline reaches agreement to divest Lucozade and Ribena for £1.35 billion

GSK is to sell its Lucozade and Ribenna brands to Suntory Beverage & Food Ltd
GSK is to sell its Lucozade and Ribenna brands to Suntory Beverage & Food Ltd

GSK is increasing its focus on its Consumer Healthcare business and is subsequently selling its Lucozade and Ribena brands to Suntory Beverage & Food Ltd

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9 September 2013

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GlaxoSmithKline today announced it has reached agreement to sell its nutritional drinks brands Lucozade and Ribena to 

GSK is to sell its Lucozade and Ribenna brands to Suntory Beverage & Food Ltd

GSK is to sell its Lucozade and Ribenna brands to Suntory Beverage & Food Ltd

 GSK is to sell its Lucozade and Ribenna brands to Suntory Beverage & Food Ltd (SBF), the Japanese consumer goods company, for £1.35 billion in cash. It is expected that the transaction will be completed by the end of the year, subject to regulatory approvals.

GSK’s Consumer Healthcare business has been increasing its focus around a core portfolio of healthcare brands, with a particular emphasis on emerging markets. As part of this, the company initiated a strategic review of Lucozade and Ribena in February 2013 and subsequently announced its decision to divest the brands, subject to the realisation of appropriate shareholder value.

The net proceeds of the transaction after tax, fees and costs are estimated to be approximately £1.3 billion. The net profit will be excluded from core operating profit and EPS in 2013. The proceeds will be used to reduce debt and for general corporate purposes. The annual sales of the two brands were approximately £0.5 billion in 2012.

The transaction is an asset deal that will be completed on a cash and debt free basis. SBF will acquire global rights to the brands and GSK’s Coleford manufacturing site, which is located in the Forest of Dean in the UK. The vast majority of employees at the site and those working on Lucozade and Ribena in commercial and R&D functions will transfer to SBF under the provisions of English employment law. In Nigeria, GSK will continue to manufacture and distribute Lucozade and Ribena under licence from SBF.

David Redfern, chief strategy officer, GSK, said: "Lucozade and Ribena are iconic brands that have made a huge contribution to GSK over the years, but now is the right time to sell them as we increase the focus of our Consumer Healthcare business and execute the delivery of our late stage pipeline of pharmaceuticals and vaccines. We believe the future of Lucozade and Ribena is in good hands given SBF’s established beverages business, ambitious growth plans and also their recognition of the strong performance and capability of the GSK employees working on these products."

Suntory Beverage & Food Ltd ("SBF") is a leading global soft drink company, headquartered in Japan and listed on the Tokyo Stock Exchange, with an integrated platform across four key regions: Japan, Europe, Oceania and Southeast Asia. SBF has an extensive product line-up and in 2012 was the number four supplier of soft drinks globally and seconnd in Japan. SBF’s vision is to be the leading global soft drink company recognized for its premium and unique brands.

 

 

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