Regulators may block Coke's bid for Huiyuan
5 September 2008
Shares of China Huiyuan Juice Group dropped 7.7% yesterday in Hong Kong on concerns that regulators may block Coca-Cola's US$2.3 billion takeover bid for the fruit-juice maker, Bloomberg reported. Experts believe Coke's bid for Huiyuan will be the first major test of China's new antitrust law, introduced last month. Donald Strazheim of US investment bank Roth Capital Partners said the deal may violate the anti-monopoly rules, citing a regulation that protects "famous brands" from foreign acquisition. If successful, the buyout would see Coke boost its market share in China's juice market from 28% to 37%, according to Merrill Lynch analysts. Coke's Chief Financial Officer Gary Fayard said he estimates it will take until spring 2009 to win approval for the deal. More than 80% of 76,000 participants in a recent online poll by Sina.com voted against Coke's purchase of Huiyuan.