Sao Paulo, April 9 - The Brazilian Consumer Affairs Division, or SDE, approved the acquisition of local bottled tea maker Leao Junior SA by U.S. beverage giant Coca-Cola, SDE said in a press release late Tuesday.
Coca-Cola announced in March 2007 that its Brazilian unit purchased Leao Junior and its flagship Matte Leao bottled tea brand, as well as the company's three factories in southern Brazil.
The purchase price wasn't disclosed.
SDE, a division of the Finance Ministry, approved the acquisition with no restriction and will send its decision to the Justice Ministry's Antitrust Division, known as Cade, for approval.
Days after the acquisition announcement by Coca Cola last year, its global rival, PepsiCo Inc. (PEP), filed an appeal with Brazilian antitrust officials to block the deal. PepsiCo alleged that with the acquisition, the tea industry could be hurt with a larger concentration.
Despite being a small company focused on the Sao Paulo and Rio de Janeiro markets, Matte Leao is Brazil's leading maker of bottled teas. At the end of 2006, the latest data available, Matte Leao held a 45.7% share of the bottled tea market, compared with AmBev-distributed Lipton, at 24.7%, and Nestea at 24.4%.
Coca-Cola owns Nestea jointly with Nestle, which puts Coca-Cola's share of the local tea market at more than 70%. Coca Cola has been aggressive in its expansion into the non-carbonated beverage market in Brazil. In August 2005, Coke purchased Sucos Mais for 100 million Brazilian reals ($58 million).