The Ministry of Commerce says it will take a market-oriented approach in the anti-monopoly review of Coca-Cola's HK$19.65 billion takeover offer for China Huiyuan Juice Group, according to Xinhua. The ministry would act in accordance with the principles of a market-oriented economy as it opposed monopolies but supported 'normal economic activities', spokesman Yao Shenhong was quoted as saying. Coca-Cola's application for the bid would be reviewed under the anti-monopoly law once the ministry received it, said Mr Yao. The comments by the ministry come as the takeover, potentially the biggest by a foreign firm for a mainland company, faces growing protectionist sentiment on the mainland. Fears that the deal would be scuppered by the anti-monopoly law have dragged Huiyuan shares down 10.88 per cent since the 164.25 per cent surge last Wednesday when the purchase was announced. Rival domestic juice makers have said the Coca-Cola takeover would not only give the United States drinks giant a dominant share in the fast-growing juice market but also a well-known national brand. 'We are highly concerned about what's going on with the deal and we are now doing research to evaluate the possible impact on us,' said Chang Tong, a manager at China Haisheng Juice Holdings. Zhang Qian, a manager at China Lingbao Amusi Fruit Juice, a major juice maker in central and western China, said that although the takeover would not have a head-on impact on Lingbao's business, it still posed a 'monopolistic threat'. 'We hope the government and the judiciary department can forestall the deal,' said Ms Zhang. The mainland fruit drinks market is booming but fragmented, with the five biggest producers holding a 39 per cent market share. Huiyuan ranks first and Coca-Cola second, according to Euromonitor. Huiyuan vice-president Matthew Mouw, at a briefing in Hong Kong yesterday, said that government approval was the only obstacle. Chief financial officer Francis Ng Yuk-keung said the HK$12.20 per share offer price by Coca-Cola was made after careful consideration by both buyer and seller. Coca-Cola was in close contact with the ministry, although it had yet to officially submit documents for the anti-monopoly review, according to a source. The source said the company changed plans to meet government officials on Tuesday or yesterday because it needed more time to prepare the documents.
