Japanese company in takeover talks with GSK over drinks brands

Suntory Beverage & Food is in discussion with GlaxoSmithKline (GSK) over buying two of its most popular brands, Lucozade and Ribena.

The Japanese company has been in secret and detailed discussions with the seller over the past few weeks. If a deal is agreed between the two companies it will pre-empt the auction of the two brands that was set to go ahead later this month. However, anything that is agreed is likely to prove costly for Suntory, with a projected sales figure mooted of around £1.5 billion.

The potential deal, while costly, would put Suntory in a favourable position in the British soft drinks market, making it a major player and competitor to the likes of Coca-Cola and Britvic.

A sale to the Japanese company would no doubt prove frustrating to the private equity firms that have already shown an interest in Lucozade and Ribena. The news agency reported that many of these firms have said privately that they were assured of a full and open auction for the brands.

Blackstone, Lion Capital and PAI Partners are among those thought to be still considering making a bid through an auction if GSK decides to take this route. AG Barr is also thought to have been considering a bid of £1 billion.

GSK stated its intention to sell the brands as part of its efforts to focus more on its core pharmaceuticals business. However, it may still opt out of the business sale or look into pursuing their future in partnership with a buyer.

No comment has been made by the sides of the potential deal, other than a quick confirmation from Suntory to say that “nothing has been decided”.

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Related information:
GSK puts Lucozade and Ribena on the market
Lucozade and Ribena consolidated ahead of business sale
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