Wednesday, February 6, 2013

GSK looking to divest its iconic brands - Lucozade and Ribena

In line with this strategic focus, GSK has decided to initiate a review evaluating all strategic options for its iconic drink brands Lucozade and Ribena. These brands are primarily marketed in established western markets.  Lucozade was launched in 1927 while Ribena was introduced 10 years later and are both highly successful brands. 

Although GSK does not reveal detailed sales for the two products, they account for a sizeable chunk of its nutrition business, which had sales last year of £1.05bn. It is estimated that the sale of these brands can fetch GSK about £800m

GSK CEO Andrew witty at the Q4 2012 analyst conference call, said these brands are not very much alligned to its strategic focus and besides they really sit a little bit outside of the very strong synergy points of this business.  Again this is a review which as no predetermined decision, and has no options ruled in or out. So it could the most conservative end of the perimeter, conclude that we should invest more and we should carry on doing what we are doing, but with more investment in different geographies, and it could at the far end of the perimeter include divestment of these assets.

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