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The deal marks Coke's first takeover in China
since the country's antitrust regulator blocked its bid to buy
local fruit juice maker Huiyuan in 2010.
Following the disposal of the beverage business, China
Culiangwang will continue to develop its consumer products
business, the company said in a stock exchange statement. The
sale is subject approval from Chinese antitrust approvals.
Coke is paying a premium to China Culiangwang's market value of
$230 million. The company's shares, which have more than doubled
this year, were suspended ahead of the announcement. They will
resume trading on Monday.
"The proposed acquisition is in line with Coca-Cola China's
strategy to continue providing a diverse range of beverage
products to Chinese consumers with plant-based protein drinks
representing a growing beverage category in China," Coke said in
a statement.
Established in 1998, China Culiangwang, manufactures red bean
and green drinks and owns and sells "Cu Liang Wang" branded
beverages and food products.
The beverage business earned a net profit after tax of 193
million yuan ($31 million) for the year to April 2014.
It had assets of HK$1.7 billion ($219 million) as of end
October, 2014.
Standard Chartered acted as the exclusive financial advisory to
China Culiangwang, the statement said.
(Reporting by Denny Thomas; additional reporting by Ben
Blanchard in Beijing; editing by Jason Neely)
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