* Sale to Japan's Suntory would pre-empt auction -sources
* Deal for Lucozade, Ribena could be announced in days
* Price expected to be more than 1 billion pounds
* Suntory flush with cash for M&As after $4 bln IPO
By Anjuli Davies and Ben Hirschler
LONDON, Sept 5 (Reuters) - Japan's Suntory Beverage & FoodLtd is in advanced talks to buy the Lucozade and Ribenabrands from GlaxoSmithKline for more than 1 billionpounds ($1.6 billion) in a deal that would pre-empt an auctionof the iconic British drinks, two people close to the processsaid.
A deal could be announced in the next few days, one of thesources said on Thursday.
Britain's biggest drugmaker GSK announced plans in April tosell Lucozade and Ribena which are well-loved in Britain butlack global reach, especially in the emerging markets that arenow becoming the focus of its consumer health business.
Suntory Beverage, Japan's second-largest drinks maker, wasalways seen as the most likely suitor for the brands because ofits desire to grow its business through acquisitions to countersluggish demand at home.
The Tokyo-listed company is also flush with cash after aninitial public offering in June that raised $4 billion.
Suntory declined to say whether it was in talks with GSK,but acknowledged it was interested in the drugmaker's drinksbusiness. Suntory bought the Orangina Schweppes drinks brand in2009 for more than $3 billion.
"Looking to the future, we are considering a range ofpossibilities for growth including various strategic investmentssuch as this (GSK) business, but nothing has been decided," thecompany said in a statement.
JP Morgan and Greenhill are acting for GSKon the disposal, the sources said. Officials at GSK declined tocomment.
THIRSTING FOR GROWTH
Introduced in 1927 and 1937 respectively, Lucozade andRibena have annual sales of just over 500 million pounds a year.Industry analysts expect a buyer to pay around two-times sales.
The strong cash flow of the two brands was expected toattract private equity houses such as Blackstone, LionCapital, Cinven, CVC Capital Partners and KKR in addition to other drinks companies.
All the firms declined to comment about the potentialGSK-Suntory deal.
Suntory Beverage, better known at home for its alcoholicdrinks such as Yamazaki whisky and namesake beer, has said itwants to boost sales by more than three-quarters in the nextseven years to $20 billion, largely through adding brands andexpanding into new markets.
Suntory Beverage currently operates Pepsi Bottling VenturesLLC, a U.S. company that handles both production anddistribution of Pepsi brand products. It also owns severalbrands in Asia and New Zealand.
Suntory Beverage shares rose 1.3 percent on Friday to 3,500yen, compared with a 1.5 percent drop in the benchmark Nikkeiaverage, and have gained 13 percent from the IPO price.
The company is part of the privately held Suntory Group,which still controls the alcoholic beverages unit.
Glaxosmithkline (GSK)
