Coca-Cola bid for Huiyuan to test China antitrust law
Coca-Cola Co (KO.N: Quote, Profile, Research, Stock Buzz) plans to seek approval under China’s antitrust law for its $2.5 billion bid for top domestic juice maker Huiyuan, the final obstacle to what would be the largest foreign takeover of a local firm.
Analysts and lawyers said the application will be closely watched as it is the first case to test the nascent law.
Fears that the deal — which critics warn would mark the loss of a local champion to foreign control — could be derailed under the anti-monopoly regulations, have helped push down Huiyuan Juice Group’s (1886.HK: Quote, Profile, Research, Stock Buzz) shares 13 percent from its year high on Sept 3, struck after the purchase was announced.
“This will be the very first case under China’s antitrust law, implemented on August 1,” Huiyuan’s Chief Financial Officer Francis Ng told a news conference on Wednesday cashadvance.com.
“The offer price had been carefully considered by both the buyer and the sellers,” said Ng, when asked whether he thought the offer price was fair.
Coca-Cola’s Hong-based spokesman Kenth Kaerhoeg said: “We will obviously comply with the process, and we’ll facilitate it based on what the regulators ask of us.”
“It would be inappropriate to comment on the regulatory process,” he added.
The European Union Chamber of Commerce in China said on Tuesday rising economic nationalism was deterring investment by European companies and hampering access to the domestic market, saying the Huiyuan deal would be a litmus test of Beijing’s attitude toward foreign business.