Swire Pacific agrees conditional sale of US soft drinks business to UK parent firm for US$3.9 billion
- Should independent shareholders approve the sale, about half of the gain or HK$11.7 billion, would be distributed to shareholders via dividends
- Deal proceeds will be used to reduce net debt as firm keeps its strategic focus on Greater China and Southeast Asia
The sale of Swire Coca-Cola, USA to JS&S (Beverages), a unit of John Swire & Sons Limited, Swire Pacific’s parent firm, is conditional on the approval of Swire Pacific’s independent shareholders, according to a statement issued to the Hong Kong stock exchange on Wednesday.
Should independent shareholders approve the sale, about half of the gain or HK$11.7 billion, would be distributed to shareholders via a dividend of HK$8.12 per A share and HK$1.624 per B share. This “would be larger than the sum of dividends paid over the last three financial years,” according to the filing.
“The significant net proceeds from the transaction will serve to materially reduce the company’s net debt, further strengthen its balance sheet and enhance its financial flexibility,” according to the filing.
At the end of last year, Swire Pacific’s net debt amounted to HK$56.8 billion, an increase of about 47 per cent from the end of 2021. On Wednesday, Swire Pacific’s shares closed 3.67 per cent higher at HK$57.85.
