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GSK Nigeria sells Lucozade, Ribena business in N22.6b deal

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GSK Nigeria sells Lucozade, Ribena business in N22.6b deal

GlaxoSmithKline Consumer Nigeria (GSK Nigeria) Plc has effectively secured the mandate to sell its drink business as shareholders of the company approved the divestment to Suntory Beverage & Food Nigeria Limited for headline value of about N22.6 billion.

GSK Nigeria’s drinks business included the two iconic brands-Lucozade and Ribena. The transaction, approved on Monday by shareholders, will see the transfer of the company’s entire business of manufacturing, bottling, marketing, distributing and selling of the Ribena and Lucozade brands in Nigeria and all assets deployed in connection with the business to Suntory. Following intense negotiations on May 31, 2016, the parties agreed to the terms of the proposed sale of the drinks business to Suntory for a headline price of $79.2 million.

Shareholders would receive a special dividend of N716 million, representing 60 kobo per share.

Chairman of GSK Nigeria, Mr. Edmund Onuzo, said part of the proceeds of the transaction would also be used in payment of taxes, cost of transaction and inter-company and trading-based debts as well as investments aimed at growing the retained business.

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He said the divestment would enable the company to focus on consumer health and ensure it continues to deliver more effective and high quality treatments for healthcare consumers.

He explained that when in September 2013, GlaxoSmithKline United Kingdom divested Ribena and Lucozade brands to the Suntory Group; GSK Nigeria had secured the rights to continue to manufacture and distribute the products in Nigeria under a 10-year arrangement which ends on August 18, 2023.

He noted that after August 18, 2023, the rights to manufacture and distribute Lucozade and Ribena in Nigeria will revert to Suntory, and the company will have no further rights to sell these products.

Suntory Beverage & Food Nigeria Limited is a subsidiary of the Japanese group, Suntory Beverage and Food Limited (SBF), a leading soft drinks company.

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.

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