Coke Moving into Middle East Market - Boeing (NYSE:BA)

Coca-Cola

announced today that it has

to buy half of Saudi Arabia's Aujan Industries' drinks business. If you're a

subscriber, you probably heard about this as soon as the story broke this morning.

The deal, valued at $980 million, gives the US cola maker and distributor a significant inroad to the growing Middle East and North African food and beverage markets. The company had reported back in October that it wished to move into those markets wherever it was strategically possible to do so. Now it seems they have their foothold in the region. The deal will give

Coca-Cola

50% of the Aujan entity that holds the rights to Aujan-owned brands, and 49% of Aujan's bottling-and-distribution company. This makes Coke and Aujan a huge partnership in the growing Middle East marketplace. This isn't the first time this year that Coke has reached out to overseas facilities and companies to build its international portfolio. In September, Coke announced a 17 million euro investment in France's

Les Pennes-Mirabeau facility

. Coke also

announced last month

that it was investing $2 billion in India, where it hopes to capture market share in a densely populated, fast-growing country. In India, Coke is competing against Pepsi

PEP

for market share. In the Middle East, Coke has jumped out into the lead ahead of Pepsi and other soda makers. This transaction represents the largest-ever investment by a multinational firm in the Middle East's fast moving consumer goods sector, reflecting the strength of Aujan's operations. Aujan holds a top-three position in still beverages in every country in which it operates and is one of the top 100 companies in Saudi Arabia with total annual revenues exceeding $850 million.

ACTION ITEMS:

Bullish:
Traders who believe that the Middle East is fertile ground for food and beverage growth might want to consider the following trades:

Buy Coke. And no, I don't mean the kind that gets you 20-to-life. Coke's stock, already a stable investment, might be even more valuable if the company can capture customer loyalty across the Middle East. This new deal might take them there.

Buy Pepsi. If Coke can do it, and do it well, it would make sense that their main competitor might also want in on the action. Even if Coke stays number one, there might be an opportunity to get in on Pepsi before they make a big move in the region (assuming they do make such a move, of course).

Consider fast food stocks, such as McDonalds MCD, that might also profit in the region.

Bearish:
Traders who believe that the Middle East move is a bad idea may consider alternative positions:

Invest in military supply companies, such as Boeing BA and Lockheed Martin LMT. Fundamentalists in the region are only going to be upset by America's increasing footprint in the region, leading to the likelihood of more war. Missile and Jet makers such as those two could benefit.

If the move backfires, companies like the Dr Pepper Snapple Group DPS might benefit by remaining here in the states.

If Americans trend toward health consciousness AND the move overseas backfires, Coke could be in a bad spot. If so, consider companies that make more wholesome products, like Heinz HNZ and other juice-making stocks.

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