Guangdong Jianlibao Group, once a leading domestic beverage maker, has been taken over by Beijing Huizhong Tianheng Investment Co.
The Beijing-based firm signed agreements on Tuesday in Guangzhou with Sanshui Zhengtian Technology and CASA Asia Corp, which have 58.3 per cent and 32.8 per cent stakes respectively in Jianlibao.
According to the agreements, Huizhong Tianheng and another firm, Beifang Hengtai Technology Investment and Management Co, have bought all the Jianlibao shares owned by the above two companies.
After the deal, Huizhong Tianheng has a controlling stake of 68 per cent, Beifang Hengtai has 23.1 per cent, while the State-Assets Management Co of the Sanshui municipal government retains an 8.9 per cent stake in Jianlibao.
However, none of the parties would disclose the deal's value.
Previous reports from some Chinese media say it took only about 10 days for the negotiations between two sides.
"Risks still exist," said Xu Ling, a Huizhong Tianheng spokesman.
According to Xu, the first priority after the acquisition is to resume Jianlibao's production as soon as possible and to get the products back on store shelves.
The deal came as a surprise since the Sanshui municipal government previously had admitted that it is negotiating with a Taiwan beverage firm.
It was reported last month that the Taiwan-based President had intentions of acquiring the debt-driven Jianlibao, with a total investment of over US$100 million.
Jianlibao's golden age was in the early 1990s, when its Jianlibao-branded beverage was one of the best sellers along with foreign brands Coca Cola and Pepsi in China.
But poor management, bad investment moves and fierce market competition dragged the company into heavy debt.
(China Daily 11/18/2004 page10)