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Swire buys Coca-Cola’s Cambodia, Vietnam operations
Hong Kong-based Swire Pacific has announced it is buying the packaging and distribution operations of Coca-Cola Company’s bottling plants in Cambodia and Vietnam for $1.02 billion.
The deal will see Swire buy Coca-Cola Indochina through its Swire Beverages and Swire Coca-Cola units from Coca-Cola’s (KO) subsidiary in Japan, a release said.
The deal will “expand the group’s beverages business into one of the most rapidly growing beverages markets,” Swire said in a stock exchange filing on Monday. The deal is expected to be closed within six months, subject to antitrust approval, according to the filing.
The 206-year-old Swire, one of the two remaining British trading houses in Hong Kong, has recently been redirecting investment into its traditionally strong areas such as beverages and property, besides going into emerging sectors like health care. The company also has controlling stakes with Cathay Pacific Airways Ltd.
The Swire Coca-Cola unit already bottles Coca-Cola (KO) beverage products for markets in Hong Kong and Taiwan, as well as parts of mainland China and the US.
The latest deal will see Swire Coca-Cola own and operate Coca-Cola Beverages Vietnam Ltd, which has three bottling facilities in Vietnam, and Cambodia Beverage Company Ltd, with one bottling facility in Cambodia.
After the acquisition, Swire Coca-Cola’s franchise population will expand by 15 percent to 876 million people.
“This expansion of territories is part of a broader strategy to expand the global scale, volume, and revenues of our bottling business,” said Patrick Healy, Chairman of Swire Coca-Cola.
Shares of Coca-Cola (KO) rose 0.48% pre-market to $62.80 on the New York Stock Exchange following the announcement on Monday. The 52-week trading range was between $52.28 to $67.20.
Coca-Cola (KO) is also due to report earnings on July 26.
Coca-Cola opened its $100 million plant in Phnom Penh in early December 2016 to expand its production capacity to meet the increasing demand for beverages in the Kingdom and Asean.
The plant, situated on a 12.5-hectare land, in the Phnom Penh Special Economic Zone is able to produce Coke in 54,000 plastic recyclable bottles and 60,000 cans in an hour, said Irial Finan, then executive vice president of Coca-Cola.
“The decision to invest $100 million in the new production plant shows the certainty of our business in Cambodia. Cambodia is not only a home for investment, but its investment climate and business transparency are also better,” Finan was quoted as saying.
The production plant has some of the company’s latest technology, which will allow Cambodian staff to upgrade their skills and ensure low-cost competitiveness.
The plant was 80 percent built by Cambodians and “will be 100 percent run by Cambodians to produce the highest quality products for the Kingdom of Cambodia,” it said while launching the production unit in Phnom Penh.
Source: https://www.khmertimeskh.com/501116012/swire-buys-coca-colas-cambodia-vietnam-operations/