Glaxo offloads drinks brands in £1.35bn deal

Kasmira Jefford
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JAPANESE firm Suntory Beverage & Food yesterday agreed to buy GlaxoSmithKline’s (GSK) Ribena and Lucozade brands for £1.35bn, in one of the largest deals in the sector so far this year.

British pharmaceuticals group GSK put the two drinks brands up for sale in February as part of chief executive Sir Andrew Witty’s plans to focus on its core consumer healthcare business.

Suntory, Japan’s second-largest drinks maker by sales, was always seen as the most likely buyer for the brands after coming in early with its bid and pre-empting a possible public auction for the well-known brands.

The group amassed a $4bn war chest after its stock market flotation in June and has been on the hunt for opportunities to expand abroad to offset sluggish demand at home.

In 2009, Suntory bought the Orangina Schweppes drinks brand for more than $3bn, giving it a significant presence in France and Spain. With Lucozade and Ribena’s focus on Britain, Suntory said it expected to further boost sales – as well as extending its reach into countries such as Nigeria.

The group has also secured the rights to GSK’s Coleford manufacturing site in the Forest of Dean and said “the vast majority” of employees with be offered transfers to Suntory.

The deal is the latest in a string of acquisitions by Japanese firms including marketing giant Dentsu’s £3.2bn takeover of rival Aegis in March.