News – full story

GLAXOSMITHKLINE (GSK)  is planning to sell its “iconic” Ribena and Lucozade brands, as it seeks to focus on its core healthcare business.

CEO Andrew Witty made the announcement at the company’s first quarter results presentation. Lucozade, a range of glucose energy drinks, and Ribena, a brand of fruit-flavoured soft drinks, most famously blackcurrant, are sold mainly in western markets.

GSK said it would carry out a strategic review to look at the future of the two brands as part of its 2012 annual report. The review has now been completed.

“Now these are very important and iconic brands for us as a company. We saw some very good opportunities for us, but we think that overall, from a shareholder value perspective, that exploring the divestment of those may well release better value. We will explore that over the coming months and that will probably take the balance of 2013 to complete that process,” GSK chief financial officer Simon Dingemans told analysts.

GSK did not suggest a potential sale price for the brands but analysts have told various news outlets that they should be worth £1–1.5bn (US$1.5–2.3bn).

Witty also said that GSK is setting up a “global established products portfolio” of over 50 established, but now off-patent medicines, so-called ‘tail brands’. He told reporters that brands to be included in the portfolio include heartburn and acid reflux remedies Tagamet and Zantac, Imitrex, which is used to treat migraines, and anti-nausea drug Zofran. Collectively, the portfolio has a turnover of around £3bn.

From January 2014, the global established products portfolio will be reported separately from the rest of GSK. The brands are largely non-promoted and Witty said it would allow the company to focus on new products.

“These are older, more legacy products, which require perhaps a different set of skills to bring the right value and optimise the resources we have behind them,” said Dingemans.