The Coca-Cola Co. (KO) announced yesterday (Wednesday) that it will buy China Huiyuan Juice Group Ltd. for $2.3 billion (HK$17.9 billion) in an effort to diversify its presence in one of the world’s fastest-growing beverage markets. But the deal still requires government approval, which is anything but guaranteed.

Coca-Cola’s offer of $1.56 per share (HK$12.20) is more than triple China Huiyuan’s recent closing price of HK$4.14 a share. It is the company’s largest overseas acquisition to date, and the biggest foreign takeover of a Chinese company ever. The deal values Huiyuan at 46.6 times this year’s estimated earnings, according to Bloomberg data.

"It’s a sizeable offer, but certainly a very smart one," said Lou Basenese, editor of the Oxford Club’s Takeover Trader. "It’s better than building everything from ground zero. It’s a shortcut into a promising market."

By 2025, China’s middle-class is projected to exceed 600 million. That’s twice the size of the entire population of the United States. And a great many of those people will be drinking Huiyuan products.

Sales of fruit and vegetable juices in China will grow 16% to $12.3 billion this year alone, according to Euromonitor International, whereas carbonated beverage sales are only forecast to rise 7% to $7.94 billion.

That gives Huiyuan a decided advantage. And not just because it’s a hometown player. With 220 beverage products and a 10.3% market share, Huiyuan is actually China’s biggest producer of fruit and vegetable juices. And when it comes 100% pure juice products, the Beijing-based beverage giant accounted for 43% of all sales last year.

 "There’s no question Huiyuan is the market leader in China. It just isn’t a huge market right now," said Basenese. "But that’s true of all emerging markets. It’s the massive growth potential that makes this deal, and emerging markets in general, attractive."

Coca-Cola says that it expects more than 80% of its future growth to come from markets outside of the United States. The company’s sales in China jumped 18% last year.

There is also growing speculation that Coca-Cola will take Huiyuan’s products abroad.

"It’s very possible Coca-Cola will leverage the Huiyuan brand, acquire other Chinese juice makers, then boost their output for export," Lawrence Chor, analyst at Tai Fook Securities, told Reuters.

However, the acquisition is still up for regulatory approval and there’s no guarantee the deal will pass.