GSK to sell Lucozade and Ribena to Suntory for £1.35bn

The sale will allow GSK’s Consumer Healthcare business to focus on its core healthcare brands, with a particular emphasis on emerging markets. 

The net proceeds from the sale – after tax, fees and costs – are estimated at about £1.3bn.  Money from the sale will be used to reduce debt and for general corporate purposes, said GSK. The net profit will be excluded from core operating profit and earnings per share this year.

The acquisition, which followed its Orangina Schweppes purchase, was expected to help the business expand into new markets.

SBF will acquire global rights to the brands and GSK’s Coleford manufacturing site, located in the Forest of Dean. “The vast majority”​ of employees at the site and those working on Lucozade and Ribena in commercial and research and development functions will transfer to SBF.

GSK will continue to manufacture and distribute Lucozade and Ribena in Nigeria under licence from SBF. N

'Now is the right time to sell'​

David Redfern, GSK’s chief strategy officer, 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.”​

Although Ribena and Lucozade achieved combined sales of about £500M last year, GSK decided to dispose of the brands in April after a strategic review.

Meanwhile, Unite the union has demanded “copper bottomed guarantees”​​ about its members' job security, terms and conditions.

Acquisition of Orangina Schweppes​

Suntory established its Europe bridgehead in 2009 with the acquisition of Orangina Schweppes for £2.2bn.

Its latest purchase was aided the £2.6bn it raised from a stock market floatation earlier this year.

SBF is based in Japan and listed on the Tokyo Stock Exchange. It supplies four key regions: Japan, Europe, Oceania and Southeast Asia.

In 2012 the firm was ranked the world’s fourth largest supplier of soft drinks and the second largest in Japan.

The sale is expected to be completed by the end of the year, subject to regulatory approvals.

In July, Vimto brand owner Nichols, fuelled speculation​ it would bid for the GSK brands.

“We are monitoring the sale of GSK’s drinks brands with interest but we understand that the process is in its early stage,”​ said a spokesman.

Lucozade was first made in 1927, while Ribena dates back to the 1930s.