Beverage giant The Coca-Cola Company has announced its intention to make cash offers to purchase China Huiyuan Juice Group, a Hong Kong listed company which owns the Huiyuan juice business throughout China.
Muhtar Kent, president of The Coca-Cola Company says Huiyuan is a long-established and successful juice brand in China and is highly complementary to the Coca-Cola China business.
He says, “This acquisition will deliver value to our shareholders and provide a unique opportunity to strengthen our business in China, especially since the juice segment is so dynamic and fast growing in China. It is also further evidence of our deep commitment to China and to providing Chinese consumers with the beverage choices that meet their needs.”
If successful with the offers, the Coca-Cola Company will further develop the Huiyuan brand to address the evolving needs of consumers. There are anticipated synergies that will drive operational efficiencies, particularly in the Huiyuan business' production footprint and in Coca-Cola's distribution and raw material purchasing capabilities.
The Coca-Cola Company is offering HK$12.20 per share, and an equivalent price for outstanding convertible bonds and options.
The Company has accepted irrevocable undertakings from three shareholders for acceptance of the offers, in aggregate representing approximately 66 per cent of the Huiyuan shares.
Assuming full acceptance of the offers, the deal is valued at approximately US$2.4bn. The transaction is expected to be dilutive to the Company's earnings per share by $0.03 to $0.04 in the first full year following completion of the acquisition and accretive to earnings per share in year three after completion.
