Coca-Cola may abandon China juice acquisition: FT

BEIJING - Coca-Cola may abandon a 2.4-billion-dollar acquisition of China's top juice company Huiyuan after learning it might not be allowed to keep the iconic brand, the Financial Times said on Wednesday.

By (AFP)

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Published: Wed 18 Mar 2009, 11:27 AM

Last updated: Sun 5 Apr 2015, 10:41 PM

The deal, which would be the largest foreign takeover of a Chinese company, is at risk because the commerce ministry is unwilling to let the US beverage giant have Huiyuan's brand rights, the paper said, citing unnamed sources.

"If Coke can't own the Huiyuan brand it is difficult to be optimistic about a successful completion of this deal," one person close to the matter told the Financial Times.

After the report, Hong Kong-listed shares in China Huiyuan Juice plunged 19 percent before being suspended, according to Dow Jones Newswires.

The development comes with the commerce ministry due to announce on Friday whether it would extend an ongoing probe into the planned acquisition, which was first announced in September.

A final deadline for approving or rejecting the deal is next Monday, after which Coca-Cola has the right to renegotiate the terms.

The deal has been widely seen as the first big test of a new anti-monopoly law that took effect in China in August last year.

Its collapse would be a "blow to multi-national companies seeking to make acquisitions in China," the business daily said.

Concerns have emerged that China might use the anti-monopoly legislation to prevent foreign companies gaining access to important sectors in the Chinese economy.

Huiyuan is a key trophy. It controls one of the nation's most recognisable brands and boasts about 40 percent of the Chinese market in pure fruit juices.

Popular Chinese portal recently posted a report quoting Huiyuan chairman Zhu Xinli as saying some Coca-Cola board members opposed the deal.

"Coca-Cola said it was under rather big pressure as there was rising opposition from its board of directors," said, citing Zhu.

Huiyuan later issued a statement saying Coca-Cola had not suggested any changes to the deal.

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