GSK to sell off Lucozade and Ribena brands

GSK announced its decision to sell off the Lucozade and Ribena brands

Analysts say sale could raise as much as $1 billion

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GSK announced its decision to sell off the Lucozade and Ribena brands

GlaxoSmithKline (GSK) has announced its decision to sell soft drink brands Lucozade and Ribena. The plan was announced on Wednesday alongside first-quarter results that saw sales drop 3% from a year ago. GSK launched a strategic review of the two drink brands earlier this year, ruling nothing in or out for their future. Most analysts had focused on the idea of a sale, which is likely to attract interest from private equity and trade buyers.

Chief executive Andrew Witty told reporters there had been significant interest in the products, though the decision to pursue a sale was "subject to appropriate value realisation".

"We concluded that the tremendous growth potential of these iconic brands, particularly outside the core western markets, could be better leveraged by companies with existing category presence and infrastructure in these region," said Witty. 

Japan’s Suntory Holdings has been tipped as a possible buyer after previously buying soft drinks maker Orangina Schweppes for more than 300 billion yen ($3bn) and New Zealand’s number two beverage firm, Funcor Group in 2009.

The popular soft drink brands date back to 1927 and 1938 respectively. Global sales of Ribena grew by 2% in the first three months of this year. However Lucozade sales dropped 2%, and sales in Europe fell by 7%.

Lucozade and Ribena were owned by Beecham prior to its merger with SmithKline in 2000.

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