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.
UK drugmaker GlaxoSmithKline Plc (LON:GSK) has hired JPMorgan Chase & Co (NYSE:JPM) and Greenhill & Co Inc (NYSE:GHL) to help it offload nutritional drink brands Lucozade and Ribena, a spokesperson told Reuters today.
According to the representative, many lenders had shown interest in being GSK consultants on the sale.
Last month, GSK said it had decided to dispose of the specific brands in a drive to reshape its business, improve strategic focus and bolster its growth profile.
Reuters added that Japanese diversified company Suntory Holdings Ltd and buyout firms The Blackstone Group LP (NYSE:BX), BC Partners Ltd, PAI Partners, Lion Capital LLP, Bain Capital LLC, CVC Capital Partners Ltd and KKR & Co LP (NYSE:KKR) are all said to be interested in the two operations.
According to Deutsche Bank AG (ETR:DBK) analysts, the sale should fetch over GBP1.5bn (USD2.3bn/EUR1.8bn), the news agency said.
UK pharmaceuticals maker GlaxoSmithKline Plc (LON:GSK) may take full control of its US partner Theravance Inc (NASDAQ:THRX) if the latter’s respiratory drugs get the green light by the US Food and Drug Administration (FDA), Piper Jaffray (NYSE:PJC) analyst Ian Somaiya told Reuters.
At present, Theravance is awaiting FDA approval for two products that would be used for treating chronic obstructive pulmonary disease. The company is developing the drugs in cooperation with GSK, which already owns one-quarter of its stock. The final FDA decisions are expected by 12 May and 18 December.
Somaiya believes that GSK will be the frontrunner to buy out Theravance as the US company shares the economics on the respiratory business only with its partner. According to him, the purchase price could be set at around USD51.00 (EUR39.05) per share based on the potential royalty payments the target would receive on approval of the products.
Still, GSK could pay more as the cost of capital for the UK drugmaker is much lower, he added. Theravance’s current market capitalisation amounts to USD2.06bn.
Reuters could not reach Theravance, while a GSK representative refused to comment on rumours or speculation.
British drugmaker GlaxoSmithKline Plc (LON:GSK) is seen to increase to some USD14.00 (EUR11.43) a share, or around USD2.8bn in total, from USD13.00 per share, its bid to buy US biopharmaceutical firm Human Genome Sciences (NASDAQ:HGSI), or HGS, and could announce an agreement on Monday, according to Reuters sources.
The parties are currently negotiating the final details of a transaction, the informed people told the news agency.
The move comes as Human Genome investors have been pressing for talks with hostile bidder GSK after no alternative offers came in during an auction process carried out as part of the company’s strategic review, the report said.
The British group took its offer to HGS shareholders in May after the target’s board turned it down earlier in April. It set 20 July as the deadline for its bid allowing it to run beyond the 16 July deadline set by HGS for final offers to be submitted as part of its strategic review. GSK, which declined to participate in that process, said the extension to its bid would enable HGS shareholders to compare the results of the board’s review to the hostile offer.
The transaction offers immediate premium liquidity to HSG’ investors, while sparing them the inevitable high risk involved in HSG pursuing its future growth objectives, the buyer explained.
It is also in line with GSK’s long-term growth strategy and would help it simplify its business model.
GSK has repeatedly said it was willing to meet with HGS and review its takeover proposal at any time, but the talks during the weekend have been initiated by Human Genome, according to one of the sources cited by Reuters.
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British drugmaker GlaxoSmithKline Plc (LON:GSK) said on Tuesday it had struck a deal to buy the shares it does not already own in proteomics technologies developer Cellzome for GBP61m (USD98.1m/EUR76.3m) in cash.
By taking full control over this company, Glaxo will gain a proteomic mass spectrometry and screening capability which provides it with an improved knowledge of drug targets. The transaction is in line with the buyer’s research and development (R&D) strategy of cooperating with external partners. It is expected to close on 21 May 2012.
As the company is not interested in some of Cellzome’s assets and activities, the latter’s stockholders, including Glaxo with its current 19.98% holding, will form a spin-off entity to hold the rights to these operations.
At present, Glaxo and Cellzome are working together on two active early-stage research initiatives using the discovery capabilities within the immune-inflammation therapy area. Following the takeover, the buyer would be able to use these technologies across its entire portfolio. Including this transaction, Glaxo has made a total of three platform technology acquisitions since 2007, it said.
Cellzome makes proteomics technologies which are used during the drug discovery process. The firm operates through its laboratories in Cambridge, the UK and Heidelberg, Germany.