Glaxo to sell two soft drink brands

Drugmaker GlaxoSmithKline P.L.C. said Monday it had agreed to sell two soft drink brands to the Japanese company Suntory Beverage & Food Ltd. for $2.1 billion so it can focus on its pharmaceutical products.

Glaxo, which is based in London and operates in Philadelphia and surrounding areas, said in February that it would look for a buyer for the drink brands, Lucozade and Ribena.

Those brands, which are well known in the United Kingdom but not the United States, generated about $785.5 million in sales in 2012. Glaxo said it would use the cash to reduce debt.

"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, Glaxo's chief strategy officer, said in a statement.

Suntory Beverage & Food is one of 206 companies in the Suntory Group, which was founded in Osaka, Japan, in 1899, and went public via the Tokyo Stock Exchange in 2009. The soft drink subsidiary is the world's No. 4 supplier, second in Japan.

Suntory will also get GSK's manufacturing plant in Coleford, about 130 miles west of London. Glaxo said in its statement that the "vast majority of employees at the site and those working on Lucozade and Ribena in commercial and [research and development] functions will transfer to SBF under the provisions of English employment law."

Glaxo will keep a factory in Nigeria to manufacture and distribute Lucozade and Ribena under a license from Suntory.

In 2009, Suntory bought the European-based Orangina Schweppes from two private equity funds, Blackstone Group and Lion Capital. Suntory also has bottling agreements with Pepsi.

Pharmaceutical manufacturer GlaxoSmithKline said it would sell two soft-drink brands, Ribena and Lucozade, to Japan-based Suntory for $2.1 billion. The drinks are well known in the United Kingdom. Suntory also gets a U.K. factory that makes the beverages. In 2012, sales of the two brands were just under $785 million.EndText