Japan's Suntory in talks to buy GSK drink brands

Japanese drinks giant Suntory Holdings is in advanced talks to buy the Lucozade and Ribena soft drinks brands for a possible $1.56 billion from British drugs firm GlaxoSmithKline, a report said Friday.

Japan's leading Nikkei business daily said its Suntory Beverage & Food unit has emerged as a "major candidate" to buy the two brands.

A source in London told AFP Thursday the two sides were discussing the move, after GSK in April confirmed plans to sell the Lucozade energy drink and Ribena fruit juice as part of plans to restructure its European operations.

Analysts said a sale net the British firm a total of ??1.0 billion ($1.56 billion, 1.19 billion euros).

Suntory, one of Japan's biggest brewers and non-alcoholic drinks makers, has embarked on a string of overseas acquisitions in recent years to offset a shrinking domestic market.

Suntory Beverage & Food, which raised about $3.9 billion in an initial public offering in July, is hoping to strengthen its soft drink business in Europe and North America with the purchase of the GSK brands, the Nikkei said.

A Suntory spokesman declined to confirm the report, saying: "We have no comment as no decision has been made."

Suntory said last year it would form a joint venture with Chinese brewer Tsingtao to expand its reach in China, the world's biggest beer market.

It has also said it will buy a 51-percent stake in Indian food and drink maker Narang Group and set up a joint venture. In 2009 it bought Europe's Orangina Schweppes Group for about $3.3 billion.