Allen & Overy has advised GlaxoSmithKline (GSK) on the sale of its nutritional drinks brands Lucozade and Ribena, to Suntory Beverage and Food Ltd (Suntory), the Japanese consumer goods company, for GBP1.35bn.

It is expected that the transaction will be completed by the end of the year, subject to regulatory approvals.

Following GSK’s strategic review, it was decided that the company increases its focus around a core portfolio of healthcare brands, with a particular emphasis on emerging markets. As part of the review, a decision was made to divest the two brands, Lucozade and Ribena subject to the realisation of appropriate shareholder value.

Under the agreement, Suntory will acquire global rights to the brands with the exception of Nigeria, where GSK Nigeria will continue to manufacture and distribute Lucozade and Ribena under licence from Suntory. In addition, Suntory will acquire GSK’s Coleford manufacturing site, which is located in the Forest of Dean in the UK. The vast majority of existing employees at the site will transfer to Suntory under the provisions of English employment law.

Commenting on the deal, A&O corporate partner, Ed Barnett says: "We are proud and delighted to have worked with GSK on this strategic transition and contributed to achieving GSK’s stated aims of diversifying these iconic brands, provided appropriate value was realised for shareholders".

David Redfern, Chief Strategy Officer, GSK, said: "Lucozade and Ribena are iconic brands that have made a huge contribution to GSK over the years, but now is the right time to sell them as we focus on delivering our pipeline of new drugs and expanding our range of consumer healthcare products around the world. The future of Lucozade and Ribena is in good hands given Suntory’s established beverages business and ambitious growth plans in western markets and for our shareholders, we believe the deal represents an attractive return."

The A&O team was lead by corporate partners Ed Barnett, Andrew Ballheimer with assistance from Matthew Appleton and Nigel Parker.