UPDATE 2-Tingyi exec sees China approving Pepsi deal in March
* Expects tie-up deal with Pepsi to receive approval next month
* Deal seen positive for both firms
* Tingyi HK shares outperform market
By Argin Chang
TAIPEI, Feb 22 (Reuters) - Chinese instant noodle and beverage maker Tingyi Holdings Corp expects to receive approval from Chinese regulators for its tie-up with PepsiCo Inc as early as March, Tingyi's parent company in Taipei said on Wednesday.
PepsiCo agreed to sell its interest in 24 soft drink bottlers in China to Tingyi in November, a move seen as an acknowledgment that its strategy in China was not working.
"We should be able to hear some good news next month," Ting Hsin International Group Chairman Ying Chiao Wei told Reuters on the sideline at the Commonwealth Economic Forum in Taipei.
"If the deal gets approved in March, we'll be able to merge very soon and it will help our sales growth a lot."
This is the first time the company has indicated when it expects to receive regulatory approval.
In a speech to the forum, Wei said he was prudently optimistic about getting approval from China's commerce ministry "very soon".
Tingyi shares closed up 0.45 percent in Hong Kong On Wednesday, versus an 0.33 percent rise in the broader market .
According to the terms of the deal, PepsiCo will initially receive only 5 percent of Tingyi-Asahi Beverages (TAB), Tingyi's joint venture with Japan's Asahi Group Holdings Ltd, a stake the companies valued at about $55 million.
PepsiCo has the option of increasing its stake to 20 percent by 2015, when China is projected to become the world's largest market for bottled drinks.
Analysts see the deal as positive to both companies as it allows Tingyi to expand its beverage offerings without hurting its balance sheet, and PepsiCo to unload the loss-making operations.
A combined Pepsi and Tingyi would control about 20 percent of the Chinese soft drink market, according to data from Euromonitor International, overtaking Coca-Cola, which has market share of nearly 17 percent. PepsiCo is currently fourth with a 5.5 percent stake.