Swire said to near deal for US$1b Coke bottling operations

[HONG KONG] Hong Kong conglomerate Swire Pacific Ltd is nearing the acquisition of Coca-Cola bottling assets in China from a unit of state-owned food giant Cofco Corp, people with knowledge of the matter said.

Swire is close to an agreement to purchase stakes in Coca-Cola bottlers from Cofco's China Foods Ltd subsidiary, the people said, asking not to be identified as the information is private.

The deal could value the businesses at about US$1 billion, according to the people. An announcement may come as soon as this week, one of the people said.

The purchase comes as an emerging Chinese middle class gravitates toward foreign brands from fashion apparel to food and beverage products. China Foods said in August it was exploring the sale of its stakes in ten Coca-Cola bottling companies in the country, including some operations that are joint ventures with Swire.

Negotiations could still fall apart or be delayed, the people said. Representatives for Swire and Atlanta-based Coca-Cola Co declined to comment beyond earlier statements.

A representative for China Foods didn't immediately respond to a phone call and e-mail seeking comment.

BLOOMBERG