Coca-Cola (KO) has offered $2.4 billion to acquire Beijing-based China Huiyuan Juice Group Ltd. If successful, the purchase would be the second-largest in Coke’s history and one of the largest ever of a Chinese company by a foreign entity.
KO’s saturation of the soda market has led it on a buying spree of juice, water and other non-soda companies (including ones in Russia and Mexico) over the last several years.
The benefits of gaining a stronger foothold in China are obvious, but the timing of this acquisition would also be particularly good for Coke. Their $400 million Olympic sponsorship campaign showed very positive early returns.
KO said the deal would dilute its earnings by $0.03-$0.04 a share in the first year, and that it would be accretive in the third year after the deal.
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