Bottled water continues to be a huge market worldwide. Back in May, China Water entered into a definitive merger agreement with Heckmann Corporation. Closing of the merger is expected to occur on October 31st, pending shareholder approval. The joining of the two water giants is expected to continue the financial flexibility of the conglomerate, with the acquisitions of two multi-million dollar bottled water companies as proof of their new purchasing power.
U.S. sales of bottled water rose by nearly 10 percent in 2006, according to estimates from Beverage Marketing Corporation provided to the International Bottled Water Association. Americans consumed about 8.3 billion gallons of bottled water last year - about 26 gallons per person. China being the fastest growing country in the world is set to outpace the U.S. in water consumption.
Beijing Changsheng Taoda Co., Ltd. was acquired for $6.0 million in cash. Beijing Changsheng Taoda Co. currently operates one newly built facility outside Beijing, with an annual capacity of approximately 247.1 million small bottles. Changsha Rongtai Co., Ltd. was acquired for $5.7 million in cash. Changsha Rongtai Co. currently operates one facility in Changsha, Hunan province, which has an annual small bottle capacity of approximately 178.5 million bottles.
“These acquisitions demonstrate our continuing ability to execute our growth strategy of consolidating the highly-fragmented bottled water market in China,” stated Hong Bin Xu, the Founder, Chairman and CEO of China Water. “The demand for bottled water in China remains strong, fueled by the country’s continued economic growth, favorable demographic characteristics, and the need for clean, safe drinking water.”
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