Coca-Cola Acquires Controlling Shareholding in KBL
With Kerry Group's increasing focus on its core business areas -- hotel management, property development and logistics -- Coca-Cola has increased its equity ownership through this opportunity in bottling operations in China.
30/08/06 The Coca-Cola Company has announced today the acquisition of a controlling shareholding in Kerry Beverages Limited, its bottling joint venture with the Kerry Group -- a conglomerate based in Hong Kong. KBL was formed by Coca-Cola and the Kerry Group in 1993, and has majority ownership in 11 joint ventures that manufacture and distribute products of The Coca-Cola Company across 9 provinces in China. KBL also has a minority interest in the joint venture bottler for Beijing. The transaction does not affect the local shareholding structure of the bottlers in China.
With Kerry Group's increasing focus on its core business areas -- hotel management, property development and logistics -- Coca-Cola has increased its equity ownership through this opportunity in bottling operations in China. Coca-Cola believes that the relationship it has built with Kerry through its joint venture over the past 14 years will continue to allow Coca-Cola to tap into the wealth of experience and expertise Kerry has in China.
After the deal, Coca-Cola will hold 89.5% of KBL, and will have agreed to purchase the remaining 10.5% interest by the end of 2008 at the same price per share as the initial purchase plus interest. Coca-Cola will have all voting and economic rights over the remaining shares. The other terms of the transaction remain confidential.
"Our partnership with KBL over the past 14 years has allowed our business in China to establish a strong foundation for continued growth," said Muhtar Kent, President, Coca-Cola International. "We are also grateful to Kerry for its future support of our long-term commitment to China and look forward to continued cooperation," he concluded.
"It has been a productive and successful partnership with Coca-Cola. With the change in the shareholding structure, we will be focusing on our core business areas, while The Coca-Cola Company will continue to grow the thriving operations in China." said Thomas Lui, Managing Director of KBL.
After the transaction, the Bottling Investments Group, Coca-Cola's dedicated function to manage its bottling operations, will lead the management of KBL. The existing management team of KBL will continue to play a critical role to ensure a smooth operation of the bottling operations.
