Page last updated at 06:56 GMT, Wednesday, 3 September 2008 07:56 UK

Coca Cola in $2.5bn Chinese deal

Coca Cola bottles
Coca Cola is looking to expand into seemingly healthier drinks

Drinks giant Coca Cola is to pay $2.5bn (1.4bn) for Chinese juice company Huiyan, to boost its presence in one of the world's quickest growing markets.

The firm will pay 12.20 Hong Kong dollars per share - about three times the firm's closing price on Friday.

French food group Danone owns almost a quarter of Huiyan.

While the Chinese pure fruit juice sector is currently limited, there is scope for growth as wages and living standards improve, analysts said.

Huiyan has 43% of China's pure juice market, according to AC Nielsen.

"Though it's a relatively small market in the beverages space, it's a high-growth market because of the growing personal income in China and increased health awareness," said Emma Liu, an analyst with Nomura Securities.

The juice sector in China - including pure juice and diluted drinks - is set to expand by more than 10% in years ahead, as incomes rise, analysts predicted.


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