Swire Pacific Ltd. is acquiring Coca-Cola Company’s bottling operations in Vietnam and Cambodia for $1.02 billion, marking the Hong Kong major’s first foray into the Southeast Asian beverage market.
A Coca-Cola Vietnam representative confirmed the Vietnam deal on Monday night but asked not to be named.
Prior to the Hong Kong-based conglomerate’s transactions, Coca-Cola’s bottling operations in Vietnam and Cambodia belonged to the Bottling Investment Group (BIG), a 100% owned subsidiary of the American beverages giant.
Swire said Monday that the buyer was its wholly-owned subsidiary Swire Coca-Cola, and the transactions will give the firm a leading position in one of the world's fastest growing beverage markets.
After finishing the deals, Swire Coca-Cola will own and operate Coca-Cola Beverages Vietnam Ltd., which has three bottling facilities in the country, and Cambodia Beverage Company Ltd., which has one bottling factory in Cambodia.
"This acquisition marks a major milestone for Swire Coca-Cola, significantly expanding our operating footprint and population served to a new region," said Patrick Healy, chairman of Swire Coca-Cola.
"We have been investing in building a world-class bottling system over the past 57 years. This expansion of territories is part of a broader strategy to expand the global scale, volume and revenues of our bottling business,” he added in a release from Hong Kong.
Swire Pacific noted in the release: “Vietnam and Cambodia open up significant opportunities for Swire Coca-Cola.”
Karen So, managing director of Swire Coca-Cola, said: "As a long-term strategic partner with Coca-Cola, we are delighted to be expanding our relationship through this acquisition and excited by the enormous growth potential of the non-alcoholic beverage markets in Vietnam and Cambodia, which are valued at over $6 billion and forecast to grow at over 6% in Compounded Annual Growth rate or CAGR until 2036."
"With our successful refranchising experience in the USA and Chinese Mainland between 2014 and 2017, I am confident that our continuous commitment to excellence will help capture the opportunities that these dynamic markets will bring. We look forward to the next exciting chapter in our history as we make our first foray into Southeast Asia."
Swire Coca-Cola already bottles Coca-Cola beverage products for markets in Hong Kong and Taiwan, as well as parts of mainland China and the U.S.