GlaxoSmithKline Plc. (GSK, GSK.L) announced Monday that it agreed to sell its nutritional drinks brands Lucozade and Ribena to Suntory Beverage & Food Ltd or SBF, the Japanese consumer goods company, for 1.35 billion pounds in cash. The company expects that the transaction will be completed by the end of the year, subject to regulatory approvals.
The company estimates that the net proceeds of the transaction after tax, fees and costs will be approximately 1.3 billion pounds. The net profit will be excluded from core operating profit and earnings per share in 2013. The firm said it will use the proceeds to reduce debt and for general corporate purposes.
The company initiated a strategic review of Lucozade and Ribena in February 2013 and subsequently announced its decision to divest the brands, subject to the realisation of appropriate shareholder value.
Annual sales of the two brands were approximately 0.5 billion pounds in 2012.
The company noted that SBF will acquire global rights to the brands and GSK's Coleford manufacturing site, which is located in the Forest of Dean in the UK.
The vast majority of employees at the site and those working on Lucozade and Ribena in commercial and R&D functions will transfer to SBF under the provisions of English employment law. In Nigeria, GSK will continue to manufacture and distribute Lucozade and Ribena under licence from SBF, the company said.
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