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Lucozade and Ribena sold to Suntory in £1.35 bn deal

Lucozade and Ribena sold to Suntory in £1.35 bn deal

GlaxoSmithKline has announced that it has sold its Lucozade and Ribena drinks brands to Japanese firm Suntory in a deal worth £1.35 billion.

The deal was widely expected by many analysts, after the two firms were confirmed as being in discussions with each other last week.

Both drinks brands notched up combined sales totalling around £500 million last year, but the decision to offload them was made by GSK in a strategic review made in April.

The decision to sell to Suntory, which already owns beverage firm Orangina Schweppes, was made by GSK as it looks to focus on its core pharmaceutical business.

GSK's chief strategy officer, David Redfern, said in a statement: "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."

Both brands are well-known in Britain but are not as well recognised further afield, although Suntory believes that the acquisiiotn of both drinks will allow it to expand into more markets.

Suntory has been looking to expand its brand globally in recent years to make up for sluggish slaes in its own domestic Japanese market.

The company's purchase of Orangina Schweppes for €2.6 billion (£2.2 billion) four years ago was seen by many as a first step into the European market, with many analysts convinced that this latest acquisition will strengthen that presence.

Both Lucozade and Ribena are made at a site in Coleford, Gloucestershire, and GSK has already moved to confirm that a "vast majority" of the factory's workers, as well as those working within the brands' commercial, research and development functions will be offered transfers to Suntory.

The deal has pre-empted the auction of the brands, with private equity firms such as Blackstone and Lion Capital, as well as Irn-Bru manufacturer AG Barr all reported to be considering bids.

GSK has said that it expects the sale to be completed by the end of the year.

 

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