Coca-Cola Co. has to buy Chinese juice maker, China Huiyuan Juice Group for $2.4 billion in all cash. The blue chip bottler will acquire Huiyuan – which is listed on the Hong Kong stock exchange – for a price of HK$12.20 a share, which is nearly three times its close of last Friday. Huiyuan is the largest Chinese juice making company, and would mark the biggest-ever foreign acquisition of a Chinese beverages company, if the deal materialises. Coke is already a market leader in China and this acquisition will further strengthen its position in the country.
Is India next for Coca Cola?
The foods & beverages segment has been increasingly gaining importance in the emerging markets like India and China driving biggies such as Coca-Cola and PepsiCo to shift their strategic focus to these segments. In health drinks segment, Coca-Cola India operates brands such as orange drink ‘Minute Maid’ along with various flavours under its ‘Maaza’ brand.
In one of its largest acquisition, Coca-Cola Co. acquired Energy Brands Inc., also known as Glaceau, for $4.1 billion in cash, in a move to boost its presence in the fast-growing “enhanced-water” and energy-drink markets.
Last year PepsiCo President and CEO Indra K Nooyi had said that the company would focus on its health-based drinks (non-carbonated products) portfolio. Though the bulk of the revenues come from the cola brand, their contribution has been decreasing towards the total revenues. It was later reported that Pepsi was in talks to acquire Parle Agro, which owns the brands such as “Frooti”, “Appy” and “N-Joi”. Pepsi sells various flavours of juices under the brand of ‘Tropicana’. Others such as Nestle, Hindustan Unilever, Dabur and ITC are also increasing their focus in these segments with new product launches.
Pepsi has made several acquisitions in this segment across the world. In June last year, it acquired a controlling stake in Ukrainian juice-maker Sandora Llc. for $542 million to expand the juices to other parts of Eastern Europe. Three years ago, PepsiCo paid $152 million for Sara Lee Corp.’s European nuts division. It bought Poland’s Star Foods SA in 2006 to add pretzels and corn chips.