Coke Sends a Message to China Officials

BusinessWeek reports on the news that Coca-Cola plans to invest $2 billion in China over the next three years:

For almost half a year, Coca-Cola executives have been waiting for China to give the OK to Coke’s proposed takeover of Huiyuan, the big Chinese juice company. Coke announced the $2.4 billion deal in early September, but it can’t go through without officials in Beijing agreeing that Coke swallowing Huiyuan doesn’t violate China’s antitrust law. Here we are in March, though, and they’re still waiting. One way or the other, the wait is going to end soon: Coke and Huiyuan agreed to a March 23 deadline for the deal.

With that date in mind, consider the news today from Coke that it plans to invest another $2 billion in China over the next three years. Coke’s announcement of its China plans seems like a straightforward message to the folks in Beijing: Pay no attention to critics of the deal in China who are angry at the idea of a big, bad American company taking over one of their favorite brands. Or, as Coke CEO Muhtar Kent said (according to a statement Coke released today), Coca-Cola’s “commitment and confidence in China never wavers.” Take that, opponents of the Huiyuan deal! Given the dicey state of the Chinese economy right now, I suspect that’s a message Beijing officials are eager to hear.

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