GlaxoSmithKline Consumer Nigeria, GSK Nigeria, is set to wrap up all arrangements for the sale of its drink business this August in a N22.6billion deal.
Shareholders of GSK Nigeria had in July approved the divestment of the company’s drink business to Suntory Beverage & Food Nigeria Limited in a deal worth N22.6 billion.
GSK Nigeria’s drinks business included the two iconic brands; Lucozade and Ribena. The sale included the company’s manufacturing, bottling, marketing, distributing and selling of the Ribena and Lucozade brands in Nigeria and all assets attached to or deployed in connection with the business.
After receiving shareholders’ nod of approval, parties to the transaction had applied for the final approval and “No-Objection” consent of the Securities and Exchange Commission (SEC), the capital market regulator that oversees mergers and acquisitions.
At the extraordinary general meeting in Lagos, shareholders had approved the divestment and also empowered the board to pay a special dividend of N716 million to shareholders, representing 60 kobo per share.
Chairman, GlaxoSmithKline Consumer Nigeria, Mr. Edmund Onuzo, who addressed the shareholders,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.
Onuzo 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, thus the opportunity to cash on the non-binding offer from Suntory Beverage and Food Nigeria Limited for the acquisition of the company’s drinks business.
Following intense negotiations on May 31, this year, the parties agreed to the terms of the proposed sale of the drinks business to Suntory for a headline price of $79.2 million.
Suntory Beverage & Food Nigeria Limited is a subsidiary of the Japanese group, Suntory Beverage and Food Limited (SBF), a leading soft drinks company with total sales of £6.6 billion.
