Shareholders of GlaxoSmithKline Consumer Nigeria Plc yesterday approved the divestment of the company’s drink business to Suntory Beverage & Food Nigeria Limited. Suntory Beverage bought British drinks brands Lucozade and Ribena from
GSK Global in 2013 for $2.1 billion. Since then, the company has outsourced production and sales of the drinks in Nigeria to GSK Consumers Nigeria Plc.
However, in January 2016, Suntory Nigeria made an offer to purchase the drinks business of GSK Nigeria. The directors of GSK brought the offer to shareholders to approve at the extra-ordinary general meeting held in Lagos.
Addressing the shareholders of the company on the transaction at the meeting, the Chairman of GSK Nigeria Plc, Mr. Edmund Onuzo, stated it would enable the company focus on consumer health and ensure it continues to deliver more effective and high quality treatments for healthcare consumers.
According to him, in September 2013, GlaxoSmithkline Group globally divested Ribena and Lucozade brands to the Suntory Group.
“However, at that time, GSK Nigeria secured the rights to continue to manufacture and distribute the products in Nigeria under a 10-year arrangement which ends on August 18, 2023.After that date, 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.
”On January 25, 2016, we announced that we had received a non-binding offer from Suntory Beverage and Food Nigeria Limited for the acquisition of the company’s drinks business. And following intense negotiations on May 31, 2016,we further disclosed that we had agreed the terms of the proposed sale of the drinks business to Suntory for a headline price of $79.2 million,” he said.
The chairman explained that the proceeds of the transaction would be used in payment of taxes, defray cost of transaction, payment of debts (inter-company/trading arrangements) and investment to grow the retained business.
The shareholders approved the transaction but urged the directors to ensure that they work hard to minimise the impact of the divestment on the overall performance of GSK Nigeria going forward.
The board recommended that the shareholders be paid a special dividend of 60 kobo from the proceeds of the sale, which amounts to N710million.