Suntory time for Lucozade and Ribena
Japan's drinks firm Suntory is in advanced talks to buy the Lucozade and Ribena brands from GlaxoSmithKline for more than £1bn (€1.2bn).
A deal could be announced in the next few days, one of the sources said today.
Britain's biggest drugmaker GSK announced plans in April to sell Lucozade and Ribena which are well-loved in Britain but lack global reach, especially in the emerging markets that are now becoming the focus of its consumer health business.
Suntory Beverage, Japan's second-largest drinks maker, was always seen as the most likely suitor for the brands because of its desire to grow its business through acquisitions to counter sluggish demand at home.
The Tokyo-listed company is also flush with cash after an initial public offering in June that raised $4bn.
Suntory declined to say whether it was in talks with GSK, but acknowledged it was interested in the drugmaker's drinks business. Suntory bought the Orangina Schweppes drinks brand in 2009 for more than $3bn.
"Looking to the future, we are considering a range of possibilities for growth including various strategic investments such as this (GSK) business, but nothing has been decided," the company said in a statement.
JP Morgan and Greenhill are acting for GSK on the disposal, the sources said. Officials at GSK declined to comment.
THIRSTING FOR GROWTH
Introduced in 1927 and 1937 respectively, Lucozade and Ribena have annual sales of just over £500m a year. Industry analysts expect a buyer to pay around two-times sales.
The strong cash flow of the two brands was expected to attract private equity houses such as Blackstone, Lion Capital, Cinven, CVC Capital Partners and KKR in addition to other drinks companies.
All the firms declined to comment about the potential GSK-Suntory deal.
Suntory Beverage, better known at home for its alcoholic drinks such as Yamazaki whisky and namesake beer, has said it wants to boost sales by more than three-quarters in the next seven years to $20bn, largely through adding brands and expanding into new markets.
Suntory Beverage currently operates Pepsi Bottling Ventures LLC, a US company that handles both production and distribution of Pepsi brand products. It also owns several brands in Asia and New Zealand.
Suntory Beverage shares rose 1.3pc today to 3,500 yen, compared with a 1.5pc drop in the benchmark Nikkei average, and have gained 13pc from the IPO price.
The company is part of the privately held Suntory Group, which still controls the alcoholic beverages unit.