GlaxoSmithKline plans to sell Lucozade and Ribena soft drink brands
24 April 2013
GlaxoSmithKline (GSK) will sell its popular soft drink brands Lucozade and Ribena, in a deal that would fetch the British drug maker more than £1 billion ($1.5 billion), the company said on Tuesday.
Sir Andrew Witty, CEO of GSK, had in February said that he would begin a ''review evaluating all strategic options'' for the drinks to ''look at the best ways to ensure their continued growth.''
Sir Witty's strategic options included sale of the two soft drink brands, reinvestment or licensing to turn them into more global brands.
He had said that the review would not affect Horlicks, GSK's malt-based drink, which is a popular health drink in India and Pakistan, both fast growing markets.
While releasing its first quarter results, GSK said, ''In April 2013, we completed the strategic review of our nutritional drinks brands Lucozade and Ribena and concluded that the tremendous growth potential of these iconic brands, particularly outside the 'core' Western markets, could be better leveraged by companies with existing category presence and infrastructure in these regions.
As a result, we have decided to pursue the divestment of these brands, subject to the realisation of appropriate value for GSK shareholders.''
Apart from being Britain's largest pharmaceutical company, GSK is also the country's third-biggest soft drinks maker, behind Coca-Cola and Britvic.
Lucozade, a glucose-based sports drink, was launched in 1927, and over 80 years, GSK has expanded this product to five different categories.
First made using blackcurrants in the 1930s, Ribena is a fruit drink available in a number of different flavours, including apple, orange, raspberry and pomegranate. The best-selling variety is still made from fresh blackcurrants.
Both drinks contributed £400 million last year to GSK's global sales of £26.4 billion.