China rejects Coca Cola takeover of soft-drink maker (Roundup)

Mar 18, 2009, 9:48 GMT

   Beijing - Chinese authorities on Wednesday rejected the takeover of China Huiyuan Juice Group Ltd, a leading producer of fruit juices, by the Coca Cola Company, the world's largest maker of beverages.

   A takeover could 'disturb market competition' the Ministry of Commerce said in a statement following an investigation with 'exactly followed relative laws and regulations,' the official Xinhua news agency said. Coca Cola's bid failed to meet China's anti-monopoly law, the ministry added.

   'If the acquisition of Huiyuan went into effect, Coca-Cola is very likely to take a dominating position in the domestic market and the consumers may have to accept the high price fixed by the company as they don't have more choices,' the statement said.

   Coca Cola's 2.3-billion-dollar cash offer for Huiyuan would have been the biggest takeover of a Chinese business by a foreign company. The US-based beverage maker's offer was well above Huiyuan's Hong-Kong listed share price.

   Huiyuan is China's largest privately owned juice producer.

   Coca Cola said the three largest shareholders, who among them hold 66 per cent of Huiyuan, had already given their agreement to the deal. French food company Groupe Danone holds 23 per cent of the Chinese juice maker.

   The US company said earlier this month it wanted to invest more than 2 billion dollars in new bottling plants and infrastructure in China.

   The ruling was regarded a first test of China's new anti-monopoly legislation, which came into force in August 2008.