It is difficult to determine the monopoly of Kangbiao’s marriage beverage

Recently, this reporter learned that Master Kong’s acquisition of PepsiCo’s Mainland business will be approved by the Ministry of Commerce and an official statement will be issued in the near future.

Dingxin Group Chairman and Chief Executive Officer Wei Yingjiao recently said at the World Economic Forum that he expected the Chinese Ministry of Commerce will soon approve the company’s acquisition of PepsiCo’s China operations.

If this transaction is approved, Pepsi will transfer its indirect holdings in the bottling plant to Master Drinks, which will result in an indirect shareholding of 5% in Master Drinks. As China is expected to become the world's largest beverage market, Pepsi will also have the right to decide to increase its indirect shareholding in Master Kong beverages to 20% by 2015.

As of June 30, 2011, the unaudited consolidated net asset value of Tingyi Beverages Holdings Group was approximately US$1.1 billion. Based on this calculation, the book value of PepsiCo's 5% stake was approximately US$55 million.

However, the deal still needs to meet several conditions to take effect, including the Ministry of Commerce's follow-up to China's anti-monopoly law approval and the shareholders' meeting.

Analysts believe that Coca-Cola, Master Kong and Pepsi are located in the first, second and fourth positions in the soft drink market in the Mainland. After Master Kong and PepsiCo cooperated, the market share of the two reached 19.9%, which will firmly position the soft drink market first.

Zhou Sianran, a food industry researcher at CDIC Advisors, said in an interview with reporters: “Because there are many types of beverages at present, the frequency of replacement is high, and their substitutability is strong. Coupled with the diversified situation of production companies, the formation of alliances is difficult to cause monopoly. However, there is no doubt that this alliance formed by Master Kong and Pepsi will inevitably pose a threat to other beverage companies, which will make the market competition more fierce and will also cause changes in the market structure, which will have a major impact."