The single largest acquisition of a Chinese company by a foreign firm in Chinese history is likely to be pulled off by the world's largest beverage company. Coca-Cola Co. is offering to buy the China Huiyuan Juice Group, for $2.5 billion, about three times the current value of the firm based on its Hong Kong-listed share price.
Regulatory approval pending, Coke will buy all the outstanding shares, bonds and options of Huiyuan and take the company private. The French food company Groupe Danone owns about 23 percent of Huiyuan and American private equity firm Warburg Pincus 6.8 percent.It's worth noting that Danone's journey in the Chinese beverage market has been marked with dozens of lawsuits with its Chinese partner Wahaha. Danone may still be trying to cope with the denial ruling by a Swedish arbitration tribunal in July. Beijing-based Huiyuan said it dominates the pure juice market in China with 46 percent of market share. In addition to pure juice, the company also makes diluted juice, fruit vinegar, bottled water, nectar, etc. Huiyuan's packaging solutions include 1-liter and 1.5-liter PET bottles. The company told Chinese press earlier this year that it runs 15 PET aseptic cold-filling lines. And I found from the company Web site that Huiyuan makes PET bottles in-house with Sipa blow molding equipment.It looks like that Huiyuan, with more than 30 factories nationwide, is stronger in northern China than the southern regions. But the company currently is setting up production in Guangdong province.It's also interesting that Huiyuan's listed entity doesn't represent Huiyuan's entire portofolio. The concentrated juice business, for example, is directly owned by Huiyuan Beijing.Links:
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