January 2017
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BEVERAGES & FOOD CHAIN
Quenching more thirsts in China
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BEVERAGES & FOOD CHAIN

John Slosar, Chairman of Swire Pacific (right), with Coca-Cola’s Chairman and Chief Executive Officer Mr Muhtar Kent (centre) and COFCO Corporation’s Chairman Mr Zhao Shuanglian, pictured at the signing ceremony, which took place in Beijing on 19th November.
John Slosar, Chairman of Swire Pacific (right), with Coca-Cola's Chairman and Chief Executive Officer Mr Muhtar Kent (centre) and COFCO Corporation's Chairman Mr Zhao Shuanglian, pictured at the signing ceremony, which took place in Beijing on 19th November.


Swire Beverages Holdings Limited ("SBHL") has entered into a conditional master agreement with The Coca-Cola Company ("Coca-Cola") and a subsidiary of China Foods Limited ("China Foods") and has submitted a conditional bid in an auction conducted in accordance with PRC law to acquire certain assets from the China Foods group. SBHL's bid was successful. If the conditions to which the bid and the master agreement are subject are satisfied, there will be a realignment of the Coca-Cola bottling system in Mainland China. Coca-Cola will cease to be directly interested in bottling operations. This will leave subsidiaries of SBHL and China Foods with larger bottling operations in contiguous territories. This is expected to improve efficiency, result in savings in distribution and administrative costs and permit faster and better aligned decision making. SBHL has also agreed to acquire from a subsidiary of Coca-Cola the 12.5% interest in Swire Beverages Limited ("SBL") which is not already owned by SBHL. SBL is the holding company for the majority of Swire Pacific's interests in companies engaged in the non-alcoholic ready-to-drink business in Mainland China and Hong Kong.

If the realignment proceeds, it will result in SBHL having controlling interests in companies operating in territories in which 49% of the Mainland China population live, and in which 51% of Coca-Cola beverages were consumed in Mainland China in 2015. The corresponding percentages before the realignment are 31% and 34% respectively. At present, SBHL has interests in franchise territories in Mainland China in Fujian, Anhui, Henan, Shaanxi, Guangdong, Zhejiang and Jiangsu. SBHL will take on franchise territories in Hubei, Guangxi, Yunnan, Jiangxi, Hainan and Shanghai and the cities of Zhanjiang and Maoming in Guangdong, and will increase its interests in franchise territories in Jiangsu, Zhejiang, Anhui, Fujian, Henan and Guangdong. The Shaanxi territory will be transferred to a subsidiary of China Foods.
Quenching more thirsts in China
Quenching more thirsts in China
A sweet treat in Mainland China
A sweet treat in Mainland China
World-class facility in Vietnam
World-class facility in Vietnam
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Swire News January 2017
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