Log in or Register for enhanced features | Forgotten Password?
White Papers | Suppliers | Events | Report Store | Companies | Dining Club | Videos
Soft Drinks
Return to: DBR Home | Non-alcoholic | Soft Drinks

Coca-Cola to sell China bottling stakes for $1bn

Published 21 November 2016

Coca-Cola has agreed to divest its bottling assets in China for $1bn as part of its efforts to reshape the country's bottling operations.

Under the deal, Hong Kong conglomerate Swire Pacific and Cofoc's China Foods unit each will own nearly half of Coca-Cola's bottling operations in China.

China is Coca-Cola's third-largest market by volume. The company is currently investing $4bn locally for future growth from 2015 to 2017,

It builds on $9bn of investments made by the company in the market since 1979.

earlier this year, Coca-Cola signed a non-binding letter of intent to negotiate the refranchising of its bottling operations with existing partners, COFCO Coca-Cola Beverages and Swire.

Upon completion of the transaction, COFCO will own and operate 18 bottling plants, and Swire will own and operate 17 in Mainland China.

Coca-Cola 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.”

COFCO chairman Zhao Shuanglian said: “This transaction marks a new milestone in the history of COFCO and Coca-Cola cooperation, and opens a new era of two franchise partners bisecting Coca-Cola’s marketplace in China.

“Global refranchising, refocusing on brands and markets are strategic decisions in Coca-Cola’s century-long history, and coincide with COFCO’s long-term vision of improving quality and efficiency, and building a market-oriented, specialized modern enterprise. China’s long and stable economic growth provides great opportunity for sustainable development of the beverages industry.

“And the scale effect, regional synergy and cost optimization that the new initiative brings will certainly boost Coca-Cola and its partners to achieve a new leap forward in China. The future is set by what we decide and act on today. I believe this restructure will create greater value for shareholders and society.”

Swire Pacific Limited Chairman John Slosar said: “We remain very optimistic about the long-term growth prospects for our beverages business in China, and we are convinced that this realignment will optimize the Coca-Cola system, accelerating growth and enabling us to win in the market."

Image: COFCO chairman Zhao Shuanglian, The Coca-Cola Company chairman and CEO Muhtar Kent,, and Swire Pacific chairman John Slosar at the signing of the agreement. Photo: Courtesy of The Coca-Cola Company.