Lucozade and Ribena to be gulped down for £1.5bn

GlaxoSmithKline is reportedly in talks with Japanese food group Suntory about sale

by Gabriella Griffith
Last Updated: 05 Sep 2013

GlaxoSmithKline (GSK) is in hushed talks with Japanese company Suntory (nothing to do with David Cameron on the beach) about the sale of Lucozade and Ribena for an estimated £1.5bn, according to Sky News.
 
The two GSK-owned brands were due to go to auction later this month but apparently Suntory has jumped ahead of the queue and has been discussing a sale with the British healthcare multinational for a number of weeks.
 
Sources have revealed the deal could be shaken-on in a few short days, but also warned it could also be stalled or canned altogether – tentative times for the two groups then? The deal, if pushed through, would raise almost 15 times the projected profits for the two drinks for 2013.
 
Suntory, which also owns Orangina and Schweppes, is waving its wallet about thanks to a listing on the Tokyo Stock Exchange last year, in which it raised billions.
 
GSK chief Sir Andrew Witty announced the group would be selling Lucozade and Ribena back in April of this year, and expressed his desire to sell them off to a global drinks giant.
 
‘[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 regions,’ Witty said at the time.

The British roots of both brands are incredibly strong. Lucozade dates back to 1927 and Ribena to 1938 – a sale to Suntory would increase the group’s presence in the UK market significantly.

According to reports, a pre-emptive deal between Suntory and GSK could ruffle some feathers among private equity firms – many of whom were given assurances the drinks would go to auction.

Does this signal a move away from consumer goods for GSK? It looks like they're planning to concentrate in medicines, especially in emerging markets.

If the drinks do go to Suntory, they will join a long list of British products bought up by Japanese firms, such as Branston pickle and Sarsons vinegar – although the deal may yet fall through, it will leave many asking – what will we say ‘sayonara’ to next?


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