GSK may sell Lucozade and Ribena to Japan’s Suntory
pharmafile | September 6, 2013 | News story | Sales and Marketing | GSK, Suntory, lucozde, ribena
GSK is reportedly to sell its Lucozade and Ribena brands to Osaka-based Suntory in a deal worth up to £1.5 billion.
As Sky News claimed yesterday, private sources say the deal could be announced as early as Monday. Neither company has confirmed that talks have taken place.
GSK announced in April that it would be offloading the beverages in an effort to focus on its healthcare portfolio.
At the time, chief executive Sir Andrew Witty said: “We love these brands, we think we’ve done a terrific job, but there are other potential owners able to generate greater value with a better distribution footprint.”
This move could represent the British firm’s first major step away from consumer goods not considered core to its business.
The sale would give the company a well-needed lift, which yesterday announced the Phase III failure of its experimental cancer vaccine MAGE-A3.
Further investigation of the potential blockbuster will continue, although this setback will give established competitors such as BMS’ Yervoy a stronger foothold in the billion-pound market.
The sale of will also offer GSK some welcome distraction from the ongoing bribery scandal that has hit its operations in China. The BBC reported this morning that the company might even consider withdrawing from the region as a result of the controversy.
Bloomberg reports that Lucozade and Ribena enjoy combined annual sales of £600 million. Parties interested in acquiring the brands, including equity firms Blackstone and Lion Capital, expected an open auction for the drinks brands. Although it appears now that Suntory stepped in to pre-emptively seal a deal.
The Japanese company is probably best known for its namesake beer and Yamazaki whisky brands in its home territory. In Europe, it already owns Orangina Schweppes, which it bought for £2.2 billion in 2009.
In July, Suntory made its debut on the Tokyo stock exchange, raising £2.5 billion in the process. As its home market shrinks due to a rapidly ageing population, the company has adopted a policy of overseas acquisition to maintain growth.
The Japanese stalwart already owns New Zealand-based beverage giant Frucor, and controls the production and distribution of Pepsi products in the US.
Hugh McCafferty
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