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GlaxoSmithKline to sell business to Japanese firm

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GSK to pay N716m special dividend in divestment move

 The board of directors of GlaxoSmithKline Consumer Nigeria (GSK) Plc has accepted a binding offer from a Japanese firm, Suntory Beverage & Food Nigeria Limited, a subsidiary of Suntory Beverage and Food Limited (SBF) for the divestment of GSK Nigeria’s drinks bottling and distribution business.

In a regulatory filing, directors of GSK Nigeria said they would be recommending the offer to shareholders for approval.

If the shareholders and regulators were to approve the sale, the retained business of GSK Nigeria would be its wellness, oral healthcare, nutrition and pharmaceutical and vaccines businesses.

The board of directors however assured that the company would remain listed on the Nigerian Stock Exchange (NSE).

The principal terms of the offer are expected to be set out in a circular to the shareholders as investors await further details on the transaction.

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The major products in the drinks business on offer include Lucozade, an energy drink that competes with PepsiCo Inc’s Gatorade and Coca-Cola Co’s Powerade, and Ribena, a liquid concentrate marketed toward children.

Suntory Beverage has said it plans to acquire companies in Southeast Asia, Middle East, Africa and Latin America to help double sales to 2.0 trillion yen by 2020. The Tokyo-based company derived about 31 percent of revenue from overseas markets in 2012, compared with 25 percent in 2011.

After purchasing the global rights to Lucozade and Ribena from GlaxoSmithKline United Kingdom, Suntory plans to use the acquisition to expand in countries where the UK company already operates, such as Nigeria and Malaysia.

Suntory began trading July 3, 2013 after raising almost $4 billion in Japan’s biggest share sale since Japan Airlines Co’s 663 billion yen initial public offering in September last year. Suntory Beverage, which sells Boss coffee, had bought 51 per cent of PepsiCo Inc (PEP)’s soft-drink business in Vietnam in 2013.

Parent Suntory Holdings, which sells whiskey and beer, remains unlisted. The beverage group bought France’s Orangina Schweppes Group for 300 billion yen in 2009 and paid 600 million euros in the same year for New Zealand’s Frucor Beverages Group.

Suntory Holdings had a 20 per cent share of Japan’s non-alcoholic drink market in 2012, the second-biggest after Coca-Cola Co’s 28 per cent, according to Inryosoken, a research company.

 

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