Coca-Cola’s Coup in China

The New York Times blog reports on Coca-Cola’s recent purchase of Chinese juice maker Huiyuan:

Coca-Cola bought the juice maker for about six times its 2007 earnings, whereas Coca-Cola, arguably one of the world’s premier beverage companies, trades at only four times its 2007 earnings. If Coca-Cola had paid such a high price for a company in the United States — or, frankly, anywhere else in the world — its stock would have been punished far more severely.

But the $2.4 billion price tag gives Coke something extremely unusual: control of a Chinese company.

The Chinese government resists foreigners coming in and gobbling up home-grown companies — even ones like Huiyuan, which wasn’t doing so well. After all, China is a reforming, communist dictatorship where private property rights were introduced just a few years ago.

Read also “Coke’s US$2.4B juice deal signals thirst for China companies” from the Financial Post.

Open popup

Welcome back!

CDT is a non-profit media site, and we need your support. Your contribution will help us provide more translations, breaking news, and other content you love.