Hong Kong-listed Tingyi to acquire Pepsi’s bottling assets in China

Tingyi's beverage subsidiary, Tingyi-Asahi Beverages, will become PepsiCo's franchise bottler in the mainland.

A PepsiCo announcement said, “PepsiCo currently operates its China beverage business through 24 company-owned and joint venture bottling operations. Upon approval of the transaction, PepsiCo will transfer its indirect equity interests in the bottlers to TAB, and will receive as consideration a 5 percent indirect equity interest in TAB.”

PepsiCo said it will have an option to increase its indirect equity interest in TAB to 20 percent by 2015, “when China is projected to become the world's largest liquid refreshment beverage market.”

Under the agreement, according to the announcement, TAB will partner with PepsiCo's current bottlers to manufacture, sell and distribute PepsiCo's carbonated soft drink and Gatorade brands. PepsiCo will retain branding and marketing responsibilities for the said products. Meanwhile TAB will begin co-branding its juice products under the Tropicana brand name under a license from PepsiCo.

The transaction is subject to regulatory approval in China and the approval of the shareholders of Tingyi.