As the ‘will they?, won’t they?’ saga of AG Barr’s potential merger with Britvic finally fizzled out earlier this month, speculation is mounting around who will make a move on GSK’s Lucozade and Ribena brands.
GlaxoSmithKline announced its intention to dispose of its Lucozade and Ribena drinks brands in February, with the auction – thought to be timed for the autumn – estimated to raise £1bn.
Initially, Orangina and Frucor owner Suntory appeared as the front runner, with reports saying that it had approached Nomura and Morgan Stanley to put together a bid. But AG Barr and Nichols have both now appeared as contenders.
Following the termination of the Britvic deal, AG Barr chief executive Roger White signalled possible interest in the Lucozade and Ribena brands. Asked by the Herald Scotland newspaper whether Barr might be interested in buying the brands, he replied: “GlaxoSmithKline has publicly said they will sell that business before the end of the year. As far as I am concerned, the process hasn't started in terms of information being available.”
He added: “We would always be interested in businesses and brands we think we can add value to. We will wait and see what happens.”
Meanwhile, according to Sky News, Vimto soft drink brand owner Nichols is being encouraged to consider a joint bid for Lucozade and Ribena with private equity groups, that would transform it into one of Britain's biggest beverages groups.
In a statement to Sky News, Nichols is reported to have said: “We are monitoring the sale of GSK's drinks brands with interest but we understand that the process is in its early stage.”
Beyond Suntory, AG Barr and Nichols, the other likely bidders will be private equity groups. Some have experience in the sector, such as Blackstone and Lion, which acquired the European beverages division of Cadbury-Schweppes in 2005, selling it to Suntory in 2009 for around £1.5bn.
It is though that other private equity groups including KKR, CVC Capital Partners and Bain Capital may also be considering bids.
GSK is hoping to conclude the deal by the end of the year. Whatever the outcome, it will reshape the soft drinks industry in the UK and keep the news rolling on FoodBev.com.
Source: Herald Scotland/Sky News/FoodBev Media
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