GSK declares 60 kobo special dividend to shareholders

GlaxoSmithKline Consumer Goods Nigeria Plc has announced the declaration of a special dividend of 60 Kobo per share to shareholders.

The special dividend was approved by the company’s shareholders during the extra-ordinary general meeting held on Monday, July 4, 2016 on the disposal of the company’s drinks business (Lucozade and Ribena brands) to Suntory Beverage and Food Nigeria Limited.

GlaxoSmithKline Consumer Nigeria Plc have given the company’s Board of Directors the to divest of its drinks business, namely the Lucozade and Ribena brands.

The board is seeking to sell its drinks business to Suntory Beverage and Foods Limited for $79.2m to enable the company to face its core business, which is healthcare.

The board of the company, at a meeting held immediately after the 45th yearly general meeting held in Lagos, recommended for approval by shareholders a binding offer from Suntory Beverage & Food Limited for the divestment of its drinks bottling and distribution business, following due diligence and negotiations between SBF and GSK Nigeria.

Explaining the rationale for the decision, the Chairman of the board, Edmund Onuzo, said, “The divestment decision was reached to enable GSK Nigeria to refocus and reinvest in the rapid expansion of the business’s retained business portfolio and deliver more value to shareholders.

“Despite this transaction, GSK Nigeria will still be listed on the Nigerian Stock Exchange (NSE) and will continue to manufacture, market, and distribute a portfolio of leading healthcare brands including Sensodyne, Panadol, Horlicks and, in future, the legacy Novartis brands, such as Voltaren and Otrivin.”

The transaction will include the sale of the firm’s Agbara manufacturing facility designed for drinks business and  6.45 hectares of land while the company retains 3.45 hectares of the land to enable it to invest and grow the retained GSK consumer business, according to the firm.

Onuzo explained that a special dividend of N716m, culminating in 60 kobo per share, would be paid to shareholders on the completion of the transaction.

Under the terms of transaction, the chairman explained that the company would retain the production equipment used in the GSK consumer business and would lease from Suntory those areas of the Agbara facility, which were used in the production process for the core GSK business.

The company, according to him, will also provide information technology and ‘certain other transitional services’ to the SBF for a short period, following the completion of the transaction to allow for the smooth transition.

The GSK Nigeria chairman said, “Our parent company decided not to get involved in drink business but to focus on healthcare and we see it that it is easy for us to align with their strategy.

“Suntory is a Japanese company and the third largest drink company in the world. We believe it has come to stay in Nigeria and the desire to quickly bring in its own brand underscores that fact.”

Onuzo explained that GSK would invest the proceeds of the deal 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 funds would be used to reduce the firm’s foreign currency denominated debt as well as provide optimal returns to shareholders.