Shareholders of Glaxosmithkline Consumer Nigeria Plc has approved a special dividend of 60 kobo for each share as a consolidation for the divestment of the drink business of the company to Suntory Beverage and Food Nigeria Limited.
At an Extra-Ordinary Meeting held in Lagos on Monday, board members proposed a special dividend of N716 million to be paid to shareholders on the completion of the transaction of the divestment.
In 2013, the parent company, Glaxosmithkline Group had divested Ribena and Lucozade brands to the Suntory Group but GSK Nigeria secured the rights to continue to manufacture and distribute the product in the country under a 10-year arrangement.
However, in 2016, GSK Nigeria accepted a non-binding offer from Suntory for the acquisition of the company’s drinks brand for a headline prive of $79.2 million dollars.
Speaking at the EGM, chairman of GSK Nigeria, Mr Edmund Onuzo, explained that the proposed use of proceeds includes payment of taxes, cost of transaction, debts, dividends and investment to grow retained business.
He added that transaction would give the company an opportunity to focus on growing the GSK Consumer business in alignment with its parent company, while noting that the other rationale for the transaction include monetising the low margin products, securing employment for employees at the factory and addressing payment of foreign exchange dominated debt.
Mr Onuzo who expressed satisfaction with the transaction note that the deal was rated high, even by valuers, while noting that the sales of GSK drink business and other assets including the factory appropriated to and utilises for the drink business would be beneficiary to shareholders.
Given details of the transaction, shareholders approved the special dividend of 60 kobo per share, having first objected to the proposed dividend, noting that it does not commiserate the proceeds of the transaction.