8-KMaterial AgreementsExhibits & Filings

COCA COLA CO 8-K Report, Material Agreement (Sep 5, 2008)

Filed September 5, 2008For Securities:KO

Summary

The Coca-Cola Company, through its subsidiary Atlantic Industries, has entered into definitive agreements to make a voluntary conditional cash offer to acquire China Huiyuan Juice Group Limited. This move signifies a significant strategic expansion for Coca-Cola into the Chinese juice market, a rapidly growing segment. The offer encompasses all issued shares, outstanding convertible bonds, and options of Huiyuan. The transaction is subject to customary conditions, including obtaining necessary governmental and regulatory approvals, particularly antitrust clearance. Key shareholders and entities, including HY Holdings, Danone, and Gourmet Grace, have provided irrevocable undertakings to support the offer, with their obligations guaranteed by their ultimate holding entities. Additionally, Mr. Zhu Xinli, the controlling shareholder and Chairman of Huiyuan, has entered into a non-competition agreement, which is crucial for integrating Huiyuan's operations and ensuring market exclusivity for Coca-Cola.

Key Highlights

  • 1Coca-Cola, via subsidiary Atlantic Industries, announces a conditional cash offer to acquire China Huiyuan Juice Group Limited.
  • 2The acquisition aims to significantly expand Coca-Cola's presence in the Chinese juice market.
  • 3The offer includes acquiring all issued shares, convertible bonds, and outstanding options of Huiyuan.
  • 4The transaction is contingent upon receiving necessary governmental and regulatory approvals, including antitrust clearance.
  • 5Key stakeholders, including major shareholders and related entities (HY Holdings, Danone, Gourmet Grace), have provided irrevocable undertakings to support the offer.
  • 6Mr. Zhu Xinli, Huiyuan's controlling shareholder and Chairman, has signed a non-competition deed, crucial for post-acquisition integration and market exclusivity.

Frequently Asked Questions

The primary strategic implication is Coca-Cola's aggressive expansion into the substantial and growing Chinese juice market. Acquiring Huiyuan, a leading domestic juice producer, would immediately give Coca-Cola a significant market share and product portfolio in this key category.

The acquisition is conditional upon receiving necessary governmental and regulatory consent or approval, with a specific mention of antitrust approval. The terms of these approvals must be reasonably satisfactory to Atlantic Industries, or applicable regulatory waiting periods must expire or terminate.

The key parties providing irrevocable undertakings are HY Holdings, Danone Asia Pte. Ltd., and Gourmet Grace International Limited. Their undertakings are significant because they represent a commitment from major shareholders to accept Coca-Cola's offer, which is a crucial step towards securing a controlling stake in Huiyuan. These undertakings are guaranteed by their ultimate holding companies/persons (Mr. Zhu Xinli, Group Danone S.A., and Warburg Pincus Private Equity IX, LP, respectively).

The non-competition deed signed by Mr. Zhu Xinli, the indirect controlling shareholder and Chairman of Huiyuan, is designed to prevent him from engaging in competing juice businesses after the acquisition. This ensures that Coca-Cola gains market exclusivity and can fully integrate Huiyuan's business without immediate competitive threats from its former leadership.