The bottling venture was formed by the partners in 1993, and has majority ownership in 11 joint ventures that make and distribute Coca-Cola products in a number of China's provinces.

The deal, for an undisclosed sum, will give Coca-Cola 89.5 per cent of Kerry Beverages. The firm has agreed to purchase the remaining 10.5 per cent by the end of 2008.

Kerry Group wants to focus on its core business in hotel management, property development and logistics while Coca-Cola is keen to grow sales in the huge Chinese market.

The world's biggest soft drinks maker saw its sales volume surge 22 per cent in China last year to 900 million cases, after major marketing campaigns.

"Our partnership with KBL over the past 14 years has allowed our business in China to establish a strong foundation for continued growth," said Muhtar Kent, president of Coca-Cola International.