CHINA: Coca-Cola Co. Huiyuan buy gets authorities' cold shoulder
The Coca-Cola Co. has seen its bid to buy China's Huiyuan Juice Group turned down by the country's Ministry of Commerce.
In a statement earlier today (18 March), the Ministry said it has rejected Coca-Cola's US$2.4bn takeover offer for Huiyuan, on the grounds that it would have "an unfavourable impact on competition" in China.
Hong Kong-based Huiyuan has a 40% share of the Chinese juice market.
"Coca-Cola may have been able to use its dominant status in the (Chinese) CSD market to use bundling and tie-ins of juice beverage sales or to set other exclusionary transactional terms, with the concentration restricting market competition in the juice beverage market," the Ministry said.
The statement noted that Coca-Cola had moved to address the Ministry's reservations over the purchase, but "after evaluation, the Ministry of Commerce believes this revised proposal still could not effectively reduce the negative impact on competition of this concentration.
"Therefore, based on Article 28 of the Anti-Monopoly Law, the Ministry of Commerce has made the decision to forbid the deal."
No-one was immediately available for comment at Coca-Cola as just-drinks went to press.
Had the transaction been approved, the purchase would have been one of the largest foreign takeovers in China's history. Analysts had viewed the bid as a test case for China's new Anti-Monopoly Law, with the decision expected to act as a litmus test for China's policy on foreign takeovers.
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