BEIJING, March. 18 (Xinhua) -- The
Ministry of Commerce (MOC) announced on Wednesday that Coca-Cola's bid to
acquire China Huiyuan Juice Group failed to meet the country's anti-monopoly
The MOC said on its Web site that the investigation,
which "exactly followed relative laws and regulations," found the transaction
may disturb market competition.
The Ministry of Commerce (MOC) announced
on Wednesday that Coca-Cola's bid to acquire China Huiyuan Juice Group
failed to meet the country's anti-monopoly law. (Xinhua/Yang
"If the acquisition of Huiyuan went into effect,
Coca-Cola is very likely to take a dominating position in the domestic market
and the consumers may have to accept the high price fixed by the company as they
don't have more choices," the statement of the MOC said.
Coca-Cola applied anti-trust investigation to the MOC
in September. The MOC officially launched the investigation on Nov. 11 to
determine whether the acquisition of Huiyuan would harm other rivals and
consumers rights or hamper technological development.
The acquisition of Huiyuan was the first major deal
to test China's new anti-monopoly law, which took effect on Aug. 1, 2008.
The MOC's statement said it has communicated with
Coca Cola several times and suggested it to make changes in the acquisition
document so that it would not disturb market competition. Coca Cola has not yet
Experts said the decision to reject Coca Cola's
acquisition will cost the world's largest soft drink maker the opportunity to
boost its shares of China's juice market by more than 20 percent.
Wednesday morning, market talk spread that Coca Cola
would drop the acquisition of Huiyuan. Coca-Cola's Hong Kong-based spokesman
Kenneth Kaerhoeg declined to comment.
A driver delivers Coca-Cola products to
stores in Boston, Massachusetts, April 24, 2008. (Xinhua/Reuters File
The market talk has sparked a big price drop for
Huiyuan's shares in the Hong Kong stock market. The stock suspended trading 13
minutes after the market opened Wednesday morning. It fell 19 percent to 8.30 HK
Zhang Junsheng, an economics professor at the
University of International Business and Economics said this decision aims to
maintain competition and avoid potential hostile competition.
"This move will help both domestic and overseas juice
makers to compete fairly, and is good for the development of the companies in
the long run," he said.
Coca-Cola offered to buy Huiyuan, the nation's
largest juice maker, for 17.92 billion Kong Kong dollars (2.3 billion U.S.
dollars) in cash on Sept. 3.
It said on March 6 it would invest more than 2
billion U.S. dollars over the next three years in China to build new bottling
plants and distribution infrastructure.
The MOC has received 40 anti-trust applications from
companies since last year when the anti-monopoly law was passed. It has
investigated in 29 of the total and draw conclusion for 24.