Coca-Cola's US$2.4b bid for Huiyuan faces delay
The Ministry of Commerce yesterday indicated it might take more time to vet Coca-Cola's US$2.4 billion takeover bid for Hong Kong-listed China Huiyuan Juice Group, potentially extending the tussle over the controversial deal that has triggered strong opposition from the public and domestic players.
The ministry has until Friday to decide whether it will give the green light to the acquisition, submitted in November last year for close anti-monopoly scrutiny, according to official regulations.
But Yao Jian, a spokesman of the ministry, said his agency had the right to postpone the deadline if 'necessitated by changing circumstances'.
The proposed deal has drawn a backlash fuelled by both fair play fears and nationalistic sentiment. If approved, it will be the biggest foreign takeover of a mainland firm.
Speculation is rife that the ministry, under intense pressure from the public and domestic beverage firms, could refer it to the State Council.
Mr Yao said the ministry had finished the first phase of the review and was in the thick of the second and final evaluation. 'The evaluation, carried out in line with antitrust law, involves the assessment of six aspects of the potential impact of the deal, including the merger's influence on competitors as well as on the economy as a whole.'
Mei Xinyu, a researcher at the ministry's Research Institute of Foreign Trade and Economic Co-operation, said he was informed of the strong opposition from within the industry. 'As far as I know, almost every player in the beverage industry [other than the two companies] opposes the deal. The sheer size of the market share of the duo combined is the biggest obstacle.'
According to ACNielsen, Huiyuan has 46 per cent of the country's pure fruit juice market while Coca-Cola reportedly sits on no more than 10 per cent, including pure fruit juice and other low-end juice products.
