GlaxoSmithKline to sell iconic UK brands Lucozade and Ribena

UK based GlaxoSmithKline plc (GSK), a research-based pharmaceutical and healthcare company, announced today that Suntory Beverage & Food Ltd (SBF), a Japanese consumer goods company has agreed to acquire Lucozade and Ribena, as well as their related business, assets and the global rights to the brands for GBP1.35bn on a cash and debt free basis.

GSK disclosed that it decided to sell Lucozade and Ribena having made a strategic review in February 2013 and subsequently announced its decision to divest the brands and increase its focus around a core portfolio of healthcare brands, with a particular emphasis on emerging markets.

Upon completion of the transaction the net proceeds are expected to be GBP1.3bn. The proceeds will be used to reduce debt and for general corporate purposes. The net profit will be excluded from core operating profit and EPS in 2013.

Lucozade, launched in 1927, is a UK energy drink/sports drink, while Ribena, launched in 1938, is a fruit juice/concentrate and is the fourth best-selling product in the UK. In 2012, annual sales of Ribena and Lucozade were approximately GBP0.5bn.

SBF will also acquire GSK’s dedicated Lucozade and Ribena manufacturing site in Coleford, Gloucestershire, which opened in 1947, along with an extensive sales network.

The majority of employees at the site, which is located in the Forest of Dean in the UK, as well as those working on Lucozade and Ribena in commercial and R&D functions, will transfer to SBF under the provisions of English employment law.

SBF also own the Orangina Schweppes Group in in Europe and made this acquisition to strengthen and expand its business platform both domestically and internationally, as well as to improve profitability.