CHINA: Coke sells 21% stake in still drinks ops to bottler
Coca-Cola has announced that it is selling a 21% stake in its subsidiary, Coca-Cola Bottlers Manufacturing Holdings (CCBMH), to COFCO Coca-Cola Beverages (CBL), one of its key bottlers in China.
CCBMH is the holding company for Coca-Cola Bottlers Manufacturing (Dongguan) (CCBM Dongguan), Coke's sole manufacturing entity in China for juice, juice drinks and teas. The soft drinks giant said the move marked "another milestone" in the development of its still beverages business in China.
Coke established CCBM Dongguan in 2003 as part of a strategy to broaden its product portfolio in China, and to increase its presence the growing market for still beverages in the country. CCBMH was later created as a wholly-owned subsidiary of The Coca-Cola Company (TCCC) to act as a holding company for CCBM Dongguan, which sells its range of juices, juice drinks and teas through the group's 35 bottlers across China.
On completion of the deal, CBL will hold a 21% interest in CCBMH, while another key bottling partner, Swire Beverages, will have 41%. Coca-Cola retains a 38% share in the company.
Coke said the new structure would allow "for more effective alignment of interests between Coca-Cola and its key bottling groups as all three parties will now be involved in both the manufacturing and distribution of still beverages products in China".
"Over the last five years, CCBM Dongguan, as the single national manufacturing entity for still beverages of TCCC and its affiliates, has been successful in helping our bottling partners in developing a sizeable still beverages business in China by achieving a very competitive manufacturing cost structure," said Paul Etchells, deputy group president of Coca-Cola Pacific. "We are particularly pleased with this latest milestone in China because it further strengthens our relationship with our key bottling partners and this will give further impetus to the growth of our juice, juice drink and tea businesses in China."
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