Coca-Cola thirsts for Shanghai float
Coca-Cola has become the latest multinational to unveil plans to sell shares in mainland China.
Expansion: Coca-Cola wants to ramp up investment in China
The world's largest soft drinks maker yesterday admitted it has opened up negotiations with the Chinese government with a view to floating on Shanghai's stock market.
The move would see the US behemoth obtain a secondary listing on the booming south China exchange, allowing the nation's army of savers to buy a slice of one of America's best known companies.
It joins a growing list of international firms looking to sell shares in the world's most populous country, including car maker Volkswagen, financial data provider Reuters, HSBC and Standard Chartered.
Overseas groups are currently barred from selling shares on the Shanghai market, leaving a Hong Kong float as the sole route into China's vast and growing investment pool.
But the Chinese government is poised to tear up its financial rulebook as it seeks to transform Shanghai into a financial centre of global stature.
By the end of this month Beijing is expected to give the green light to overseas companies to sell stock in Shanghai, with the first deals expected to proceed in the autumn.
The predicted flood of foreign fundraisings is likely to cement China as the world's largest market for stock market listings.
Last year 346 companies raised a whopping £51bn from share sales - more than double the US total.
For Coke, selling stock in Shanghai will allow it to ramp up investment in China. The firm has earmarked £1.2bn for Chinese expansion but may need to build more plants to maintain market share.
More important is a brand boost in the emerging economic powerhouse, where Coca-Cola's Sprite is the top-selling soft drink. Similar motives are pushing HSBC, Standard Chartered and Australia and New Zealand Bank towards Shanghai.
Their plan is to use a float as a springboard to build up their share and bond underwriting businesses in China.
Taxpayer-controlled Royal Bank of Scotland recently launched a joint venture with a Chinese broking firm to tap into the float frenzy.
It was a ground-breaking move for a UK lender, although US and European banks have for years been targeting China's nascent financial markets - with varying success.
A spokesman for Coca-Cola said it was 'exploring the opportunity' of a Shanghai float but needed to 'better understand the regulatory framework' in China.
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