Coca Cola divested its bottling business in China as it sold its assets to Swire Pacific Ltd. for 5.87 billion yuan ($852 million), the Hong Kong conglomerate announced on Friday. Swire will acquire the manufacturing and distribution assets from China Foods Ltd., which is a subsidiary of state-owned food firm COFCO Corp.

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Under the terms of the deal, Swire Pacific will buy the assets for 4.65 billion yuan ($675 million). Additionally, it will pay 1.22 billion yuan ($177 million) to Coca Cola for a 12.5 percent stake in Swire Beverages Ltd. The deal, which was initially flagged earlier this year, will be finalized after receiving approval from Chinese regulators.

The transaction will mark the end of Coca Cola's direct interest in bottling business in the mainland China. Swire said, "The company believes that it will continue to present attractive growth opportunities in the long term due to population growth, urbanization and low consumption per capita in mainland China compared with developed markets."

Swire Beverages had a long partnership with Coca Cola, spanning for over 50 years. The company, which is one of the biggest bottling partners of Coca Cola, holds franchise titles in major markets such as Taiwan, Hong Kong, and the US.

Swire Pacific chairman John Slosar said that the company will keep on collaborating with Coca Cola for strengthening the bottling operations in the mainland China and for enhancing the overall long-term value for its shareholders.

After the completion of the proceedings, Swire will own and operate 17 bottling plants, while Coca Cola's other franchise partner, COFCO will own and operate 18 bottlings plants.

TagsCoca Cola, Swire Pacific, COFCO