April 17, 2015

In a move designed to gain the company a foothold in China’s quickly growing plant-based beverages market, Coke has agreed to acquire the beverage business of China Culiangwang Beverages Holdings Ltd. for $400.5 million including debt.

This deal marks Coke’s first acquisition in China since the country’s antitrust regulatory bodies blocked its attempted takeover of juice maker, Huiyuan in 2010. Coke is paying a premium for China Culiangwang, which has a market value of $230 million, but which saw its shares more than double in value this year.

“The proposed acquisition is in line with Coca-Cola China’s strategy to continue providing a diverse range of beverage products to Chinese consumers with plant-based protein drinks representing a growing beverage category in China,” Coke said in a statement, Reuters reports.

Formed in 1988, Chiina Culiangwang manufactures red bean and green drinks, and distributes beverages and foods under its ‘Cu Liang Wang’ brand. For the year ending April 2014, the business posted net profit after tax of $31 million, and as of October 2014 has assets to the value of $219 million.

After the closing of the deal, which is subject to approval by China’s antitrust regulators, China Culiangwang states it will continue to direct its energies toward growing its consumer products business.

More on this story

To receive relevant news stories with summaries provided by GAI News, subscribe to daily or weekly service.