The Hong Kong conglomerate Swire Pacific has inked a deal to acquire Coca-Cola bottling operations in Vietnam and Cambodia, deepening its expansion in Southeast Asia.
According to a stock-exchange filing, Swire will pay $1.02 billion for the assets in Vietnam and Cambodia. The transaction will be Swire’s first investment in the beverages market in Southeast Asia and will expand the group’s business into this rapidly growing sector.
Swire Coca-Cola Limited and Swire Beverages Holdings Limited – which are subsidiaries of Swire Pacific – entered into the agreements with Coca-Cola (Japan) Co. Ltd., an indirect, wholly-owned subsidiary of The Coca-Cola Company.
Swire Coca-Cola's principal activities are investment holding and the preparation, packaging, distribution, and sale of beverages. It is one of the largest Coca-Cola bottlers in the world with exclusive rights to produce, sell, and distribute Coca-Cola products in most of mainland China, Hong Kong, Taiwan, and a portion of the western United States.
Swire Coca-Cola currently produces 62 beverage brands and distributes them to a market of 762 million consumers.
The acquisition reflects the appealingness of Vietnam's beverage market and its growing population of more than 93 million. Despite the fact that Vietnam is generally known as a lucrative market for alcoholic beverages, there are significant opportunities for brands in soft drinks.
According to a report by Statista, Vietnam's revenue in the soft drinks segment currently amounts to $7.8 billion and the market is expected to grow annually by almost 7.2 per cent (CAGR 2022-2026). By 2026, 21 per cent of the spending and 12 per cent of the volume of the soft drinks segment will be attributable to consumption in bars and restaurants.