Private Equity to quench their thirst via Lucozade and Ribena?

Back in early February, GlaxoSmithKline’s CEO, Sir Andrew Witty, announced that the company was undertaking a “strategic review” of its iconic drinks brands, Lucozade and Ribena. This came off the back of an ongoing review into the company’s European operations and a restructuring of its drug manufacturing and research designed to help the group deliver continued growth.

Today a number of private equity firms have been suggested as potential purchasers of two iconic British brands which have gradually begun to infiltrate international consumer markets.  Names such as Blackstone, KKR, Bain and CVC Capital are being put forward as potential suitors and as always when there is a high profile brand for sale, the biggest players are linked to it. Private equity is no stranger to the soft drink manufacturing industry, with over 125 investments worth USD 6.5bn being completed in this sector since 2000.

Ironically, the sector’s largest deal to date was the USD 2.2bn buyout of the Orangina soft drinks division of Cadbury Schweppes European Beverages by Blackstone and Lion Capital in February 2006. They successfully realised this investment in September 2009 when they exited the company via a sale to Japan’s Suntory Group for USD 3.8bn, so one would have to think that Blackstone and Lion might well be considering refilling their glasses with a possible acquisition of Lucozade and Ribena.