Swire Pacific subsidiary Swire Beverages has agreed to acquire Coca-Cola bottling assets in China in a bid to strengthen its business in non-alcoholic ready-to-drink beverages.
The deal to refranchise bottling operations in China has been signed with Coca-Cola and a subsidiary of China’s state-owned food firm COFCO.
As part of the deal, Swire will acquire manufacturing and distribution assets of non-alcoholic ready-to-drink beverages from COFCO subsidiary China Foods for CNY4.65bn ($637.2m).
It will also acquire 12.5% stake it does not hold in the non-alcoholic ready-to-drink venture Swire Beverages from Coca-Cola for CNY1.22bn ($167.1m), reported Reuters.
Swire Beverages managing director Pat Healy said: "Overall, this realignment will strengthen our beverages business in Mainland China, help us to capture the opportunities that this dynamic market has to offer and open up further growth pathways for Swire Beverages.
"This realignment will create a more efficient Coca-Cola bottling infrastructure in Mainland China. In tandem with our current expansion of franchise territories in the USA, this realignment is part of a broader strategy to expand the global scale, volume and revenues of our beverages business."
Upon completion of the deal, Coca-Cola’s bottling system in China will be divided between the two franchise partners COFCO and Swire Beverages.
The Coca-Cola Company chairman and CEO Muhtar Kent said: “This announcement marks the latest important chapter in the ongoing transformation of our business to refocus on our core strengths of building great brands and leading a strong, global franchise system.”
With the completion of the deal, COFCO will own and operate 18 bottling plants while Swire will own and operate 17 facilities in Mainland China.
The deal is subject to regulatory approvals from relevant government authorities.
