The Coca-Cola System in China completes definitive agreement to reshape bottling operations
The Coca-Cola Company, together with its three main bottling groups in China – Coca-Cola Bottling Investments Group China (“BIG”), COFCO Coca-Cola Beverages Limited (a subsidiary of COFCO Corporation, “COFCO”) and Swire Beverages Holdings Limited (“Swire”) – commemorated the completion of a definitive agreement to refranchise all existing Company-owned bottling operations in China. The transaction will result in a divide of the Coca-Cola’s bottling system in China between the two franchise partners – COFCO and Swire.
As Coca-Cola’s third-largest market by volume, China represents a significant long-term growth opportunity for The Coca-Cola Company and its bottling system. The Coca-Cola system in China is currently investing $4 billion locally for future growth from 2015 to 2017, building on $9 billion of investments made in the market since 1979. In February 2016, The Coca-Cola Company announced a non-binding letter of intent to negotiate the refranchising of its bottling operations with existing partners, COFCO and Swire. When the transaction is complete, COFCO will own and operate 18 bottling plants, and Swire will own and operate 17 in Mainland China.
The China transaction remains subject to regulatory approvals from relevant government authorities. Until the transaction closes, all bottling plants and customer relationships will continue to operate as normal under current bottling ownership.
