Suntory to buy GSK's Lucozade and Ribena - UPDATE

9th Sep 2013 07:56

Suntory Beverage & Food has agreed to buy GlaxoSmithKline's (GSK) drink brands Lucozade and Ribena for 1.35bn pounds in cash.GSK is selling the brands as part of overhaul announced in April to focus on developing new medicines. Suntory Beverage is spending up to 500bn yen on takeovers after holding Japan's largest initial public offering this year. The deal had been expected with reports saying the two would make an announcement on Monday. The companies confirmed the agreement in a press conference in early trading. "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," David Redfern, Chief Strategy Officer of GSK, said in a statement "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."Net proceeds of the transaction after tax, fees and costs are estimated to be approximately £1.3bn and will be used to reduce GSK's debt and for general corporate purposes.Ribena, a range of juices, and Lucozade, an energy drink, had combined sales of about £0.5bn in 2012.GSK's shares fell 0.24% to 1,647p at 09:02.RD