GlaxoSmithKline Consumer Nigeria Plc, on Monday , received shareholders nod on the sale of the firm’s drinks business to Suntory Beverage and Foods Limited for $79.2 million (N15.7b) to enable it pursue its core business of healthcare.
The transaction includes the sale of the firm’s Agbara manufacturing facility for drinks business and a 6.45 hectares of land while the company retain 3.45 hectares of the land to enable it invest and grow the retained GSK consumer business.
The Chairman of the company, Edmund Onuzo, while addressing Shareholders during the 2015 yearly general meeting and extra ordinary yearly meeting held in Lagos on Wednesday, explained that a special dividend of N716 million, culminating to 60 kobo per share would be paid to shareholders on the transaction completion.
Under the terms of transaction, the chairman explained that the company would retain the production equipment used in the GSK consumer business and will lease from Suntory those areas of the Agbara facility which are used in the production of products for the GSK business.
The company, according to him, would also provide IT and ‘certain other transitional services’ to Suntory for a short period, following the completion of the transaction to enable the separation of the drinks business including the manufacturinhg facility to allow for the smooth transition to Suntory.
The transaction, according to him, would enab le the company to focus more on growing the GSK consumer business.
“Our parent company decided not to get involved in drink business but to focus healthcare and we see it that it is easy for us to align on their strategy.
“Suntory is a japanese company and the third largest drink company in the world. We believe they have come to stay in Nigeria and the desire to quickly bring in their own brand underscores that fact.”
“Our parent company decided not to get involved in drink business but to focus healthcare and we see it that it is easy for us to align on their strategy.
“Suntory is a japanese company and the third largest drink company in the world. We believe they have come to stay in Nigeria and the desire to quickly bring in their own brand underscores that fact.”
Onuzo explained that the proceeds would be invested in the construction of a multi purpose facility to support the business and help maintain low cost but quality supply base.
He added that part of the fund would be used to reduce the firm’s foreign currency denominated indebted as well as provide optimal returns to shareholders. The Chairman, while responding to shareholders demand to increase their 60 kobo special dividend, Onuzo said: “We needed to invest on facility installation to quickly recover lost ground and grow faster than expected so that our turnover will grow while profit will be much better.
“There is a huge debt to be paid, aside costs arising from business. Bearing in mind also on the uncertainty of the future, there is no way we will increase the dividend.
“We have arrived at what we consider to be fair and equity to enable us preserve the business for tomorrow. The board considers the future before going into this arrangement,” He added.
“We have arrived at what we consider to be fair and equity to enable us preserve the business for tomorrow. The board considers the future before going into this arrangement,” He added.
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