Suntory Beverage & Food Ltd agreed to buy the Lucozade and Ribena drink brands from GlaxoSmithKline PLC for US$2.1 billion as the Japanese company reduces reliance on its domestic market.
The transaction is expected to be completed by the end of the year and the proceeds will be used partly to reduce debt, Glaxo said in a statement yesterday at the London Stock Exchange.
Suntory Beverage is preparing to spend as much as ￥500 billion (US$5 billion) on takeovers after holding Japan’s largest initial public offering this year.
Glaxo, the UK’s biggest drugmaker, is selling the brands as part of a revamp announced in April to separate older products from its bigger business of developing new medicines.
Lucozade, an energy drink, and Ribena, a liquid concentrate, had combined sales of about US$782 million last year, Glaxo said.
Suntory will acquire global rights to the brands and Glaxo’s Coleford manufacturing site.
Suntory Beverage has said it plans to acquire companies in Southeast Asia, the Middle East, Africa and Latin America to help double sales to ￥2 trillion by 2020.
The Tokyo-based company derived about 31 percent of revenue from overseas markets last year, compared with 25 percent in 2011, according to data compiled by Bloomberg.
The acquisition would allow the Japanese company to expand in countries where the UK company already operates, such as Nigeria and Malaysia, Suntory said.
Suntory Beverage, which sells Boss coffee and Orangina soda, bought 51 percent of PepsiCo Inc’s soft-drink business in Vietnam this year.
Parent company Suntory Holdings, which sells whiskey and beer, remains unlisted.
The beverage group bought France’s Orangina Schweppes Group for ￥300 billion in 2009 and paid US$939 million in the same year for New Zealand’s Frucor Beverages Group.
Suntory Holdings had a 20 percent share of Japan’s non-alcoholic drink market last year, the second-biggest after Coca-Cola Co’s 28 percent, according to Inryosoken, a research company.
Suntory Beverage almost doubled first-half net income to ￥12 billion after it pared costs and sales in Asia rose, the company said on Aug. 6.
Suntory is known for its slogan “Yatteminahare,” or “Go for it,” created by founder Shinjiro Torii.
Actor Bill Murray’s character in the 2003 film Lost in Translation introduced the company to international filmgoers with the line: “For relaxing times, make it Suntory time.”