PepsiCo Inc is to swap its bottling operations in China for a stake in Tingyi (Cayman Islands) Holding Corp’s (康師傅控股) beverage business, two people with knowledge of the matter said.
The transaction would create a business comprising PepsiCo’s stakes in more than 20 local bottling ventures and Tingyi’s beverage operations, said the people, declining to be identified before an announcement is made.
PepsiCo would initially own a minority stake in the venture, with an option to increase its holding over time, they said.
Calls to the mobile phones of PepsiCo spokesmen Peter Land and Jeff Dahncke outside regular business hours were not answered. Tingyi chief financial officer Frank Lin (林清棠) did not pick up calls to his mobile phone seeking comment.
“Pepsi is not doing well on distribution in China, on which Coke performs better,” said Christina Lie, an analyst at First Shanghai Securities (第一上海證券) in Hong Kong. “Pepsi may benefit from Tingyi’s distribution capacity.”
PepsiCo has been investing to expand its operations in the world’s most populous nation in an effort to win market share from Coca-Cola Co. New York-based PepsiCo plans to invest US$2.5 billion in China in the food and beverage businesses over a three-year period, including in manufacturing plants and research, it said in May last year.
Tingyi, the maker of Master Kong noodles, shares halted trading in Hong Kong yesterday pending a “notifiable transaction.” Its Taiwan depository receipts were also suspended.
There was to be a signing ceremony for the transaction in Shanghai yesterday, a Tingyi executive said, declining to be identified because the news had not been announced.
Tianjin-based Tingyi had said it would release a statement on the Taiwan and Hong Kong stock exchanges after 4pm yesterday, the person said.
The share swap would allow PepsiCo to gain greater access to China’s market through Tingyi’s distribution and supply chains, and win a share of the Chinese company’s non-carbonated drinks business, the two people with knowledge of the matter said.
It would see Tingyi manufacture and distribute all carbonated beverages for PepsiCo, giving the Chinese company the exclusivity to manage the US soda maker’s bottling business in the country, they said.
Tingyi would benefit from the transaction by expanding its product range. The company, already a leader in the Chinese market for instant noodles, ready-to-drink tea and bottled water, does not have many soft-drink products, Lie said.
PepsiCo’s drinks brands include Seven-Up and Tropicana, and its food products include Cheetos, Lays potato chips and Quaker cereals.
The soft-drink market, a category that includes carbonates, fruit and vegetable juice, ready-to-drink tea and bottled water, is worth 332.7 billion yuan (US$52 billion) in China, according to London--based researcher Euromonitor International.
Coca-Cola is the dominant soda maker in China with a 16.8 percent share of the soft-drink market last year, according to Euromonitor. Tingyi ranked second with 14.4 percent, Hangzhou Wahaha Group Co was third with 7.2 percent and -PepsiCo was at No. 4 with 5.5 percent, data showed.
MULTIFACETED: A task force has analyzed possible scenarios and created responses to assist domestic industries in dealing with US tariffs, the economics minister said The Executive Yuan is tomorrow to announce countermeasures to US President Donald Trump’s planned reciprocal tariffs, although the details of the plan would not be made public until Monday next week, Minister of Economic Affairs J.W. Kuo (郭智輝) said yesterday. The Cabinet established an economic and trade task force in November last year to deal with US trade and tariff related issues, Kuo told reporters outside the legislature in Taipei. The task force has been analyzing and evaluating all kinds of scenarios to identify suitable responses and determine how best to assist domestic industries in managing the effects of Trump’s tariffs, he
‘SWASTICAR’: Tesla CEO Elon Musk’s close association with Donald Trump has prompted opponents to brand him a ‘Nazi’ and resulted in a dramatic drop in sales Demonstrators descended on Tesla Inc dealerships across the US, and in Europe and Canada on Saturday to protest company chief Elon Musk, who has amassed extraordinary power as a top adviser to US President Donald Trump. Waving signs with messages such as “Musk is stealing our money” and “Reclaim our country,” the protests largely took place peacefully following fiery episodes of vandalism on Tesla vehicles, dealerships and other facilities in recent weeks that US officials have denounced as terrorism. Hundreds rallied on Saturday outside the Tesla dealership in Manhattan. Some blasted Musk, the world’s richest man, while others demanded the shuttering of his
TIGHT-LIPPED: UMC said it had no merger plans at the moment, after Nikkei Asia reported that the firm and GlobalFoundries were considering restarting merger talks United Microelectronics Corp (UMC, 聯電), the world’s No. 4 contract chipmaker, yesterday launched a new US$5 billion 12-inch chip factory in Singapore as part of its latest effort to diversify its manufacturing footprint amid growing geopolitical risks. The new factory, adjacent to UMC’s existing Singapore fab in the Pasir Res Wafer Fab Park, is scheduled to enter volume production next year, utilizing mature 22-nanometer and 28-nanometer process technologies, UMC said in a statement. The company plans to invest US$5 billion during the first phase of the new fab, which would have an installed capacity of 30,000 12-inch wafers per month, it said. The
Taiwan’s official purchasing managers’ index (PMI) last month rose 0.2 percentage points to 54.2, in a second consecutive month of expansion, thanks to front-loading demand intended to avoid potential US tariff hikes, the Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) said yesterday. While short-term demand appeared robust, uncertainties rose due to US President Donald Trump’s unpredictable trade policy, CIER president Lien Hsien-ming (連賢明) told a news conference in Taipei. Taiwan’s economy this year would be characterized by high-level fluctuations and the volatility would be wilder than most expect, Lien said Demand for electronics, particularly semiconductors, continues to benefit from US technology giants’ effort
RSS