Coca-Cola Vietnam marks third restructure following deal with Swire

The transactions will be Swire Coca-Cola's first investment in Southeast Asia, giving the company a leading position in one of the world’s fastest-growing beverage markets.

After closing, Swire Coca-Cola will own and operate the three bottling facilities of Coca-Cola Beverages Vietnam Ltd. and one from Cambodia Beverage Company Ltd. The deal will be completed within six months if there are no antitrust procedures.

Chairman of Swire Coca-Cola Patrick Healy said, "This acquisition marks a major milestone for Swire Coca-Cola, significantly expanding our operating footprint in a new region."

With young demographics, increasing urbanisation, and pre-pandemic GDP growth of over 7 per cent per year, Vietnam and Cambodia open up significant opportunities for Swire Coca-Cola.

Karen So, managing director of Swire Coca-Cola stated, "As a long-term strategic partner with Coca-Cola, we are delighted to be expanding our relationship through this acquisition and are excited by the enormous growth potential of the non-alcoholic beverage markets in Vietnam and Cambodia. They are valued at over $6 billion and forecast to grow at over 6 per cent CAGR until 2036."

Swire Coca-Cola's relationship with Coca-Cola began in 1965 and the company is a division of Swire Pacific Ltd., which is listed on the Main Board of The Stock Exchange of Hong Kong Ltd.

As the fifth largest Coca-Cola bottler in the world by volume, Swire Coca-Cola has the exclusive right to manufacture, market, and distribute The Coca-Cola Company's products in 11 provinces and the Shanghai Municipality of the Chinese Mainland, and in Hong Kong, Taiwan, and 13 states of the USA. Swire Coca-Cola manufactures over 60 beverage brands and distributes them to a franchise-wide population of over 760 million people.

Swire is also the owner of Cathay Pacific – one of the airlines offering very early flights to Vietnam. In addition, Swire invests in a variety of other fields including logistics, cold storage, and services. This is the first time the company has entered Vietnam's beverage market.

Following the news of the deal, a representative of Coca-Cola Vietnam confirmed with VIR that the restructuring does not affect the investment and business activities of Coca-Cola in Vietnam.

“We confirm the transfer of the bottling rights owned by Coca-Cola in Vietnam to Swire Coca-Cola. This transfer is approved in accordance with the current regulations and the parties commit to working closely with each other to make the transfer process smooth, minimising disruption to customers, suppliers, third-party partners, and employees."

"We expect to complete the transfer process no earlier than the end of Q3 2022. Under the transaction, the bottling partner acquires full ownership of Coca-Cola Vietnam Beverage Co., Ltd. (CCBVL), but the legal status of CCBVL still exists," said the representative of Coca-Cola Vietnam.

The representative pointed out that this is not an operation in which a new investor replaces an old one. It is just an adjustment of the owner in the same system between long-standing partners of Coca-Cola.

In the first investment phase that began in 1994, Coca-Cola Vietnam established joint ventures in three regions. In 2001, Coca-Cola Vietnam became a totally foreign-owned company under Coca-Cola Singapore, owned by a South African consortium.

In 2012, Coca-Cola announced additional investment capital of $300 million into Vietnam to restructure for the second time, so the deal with Swire Coca-Cola marks the third restructuring of Coca-Cola Vietnam.

A media representative of Coca-Cola Vietnam noted, "We are still committed to investing and realising the commitments made by Coca-Cola in Vietnam.”