Hong Kong conglomerate Swire Pacific Ltd said on Friday it will acquire Coca-Cola bottling assets in China for 5.87 billion yuan ($852 million), betting on growing consumption in the mainland of non-alcoholic ready-to-drink beverages.
Swire said it will buy China manufacturing and distribution assets of non-alcoholic ready-to-drink beverages from China Foods Ltd, a subsidiary of state-owned food firm COFCO Corp, for 4.65 billion yuan.
The conglomerate will also buy the 12.5 percent stake it does not own in non-alcoholic ready-to-drink venture Swire Beverages Ltd from Coca-Cola Co for 1.22 billion yuan, it said in a statement.
The companies had already flagged the deal earlier this year, but announced the terms on Friday. The deal is subject to approval by authorities in China.
“The non-alcoholic ready-to-drink beverages market in mainland China is sizeable. The Company believes that it will continue to present attractive growth opportunities in the long term due to population growth, urbanization and low consumption per capita in mainland China compared with developed markets,” Swire said.
Under the realignment, Coca-Cola will cease to be directly interested in bottling operations in mainland China, it said.
Shares of Swire Pacific dipped 0.7 percent on Friday morning, while China Foods fell 3.2 percent. The moves compared with a 0.2 percent rise in the benchmark Hang Seng Index.