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Media
Coca-Cola Company and Huiyuan Juice Group said Wednesday that they respect the decision of the Ministry of Commerce (MOC) to reject Coca-Cola's 2.3 billion U.S. dollar bid for China's largest juice maker.
Their statements came just hours after the MOC decision was announced.
Huiyuan respects the decision made by the MOC. The group's production is normal for the time being, the group said in a statement to Xinhua. Huiyuan will continue providing high-quality, safe and nutritious products to consumers.
The Coca-Cola Company said in a statement to media that, We are disappointed, but we also respect the MOC's decision.
Nevertheless, Coca-Cola stressed confidence in its development on the Chinese market.
We hold a long-term view of the China market, and are committed to ensuring that Chinese consumers have a wide variety of top quality beverage options available to them, said Muhtar Kent, President and Chief Executive Officer of the Coca-Cola Company, in the statement.
Huiyuan's shares on the Hong Kong stock market were down nearly 20 percent before being suspended Wednesday.
According a joint announcement made by the Coca-Cola Company and Huiyuan at the Hong Kong stock exchanges, an application has been made to require the resumption of trading in the Huiyuan Shares with effect from 9:30 a.m. on Thursday.
China's Ministry of Commerce (MOC) announced Wednesday morning that Coca-Cola's bid to acquire China Huiyuan Juice Group failed to meet the country's anti-monopoly law.
The MOC said on its Web site that the investigation, which exactly followed relative laws and regulations, found the transaction may disturb market competition.
If the acquisition of Huiyuan went into effect, Coca-Cola was 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.
Kent claimed that Coca-Cola had put a tremendous effort to help MOC have a clear understanding of the acquisition during the application process, and that the company had been hoping to stimulate growth for the Huiyuan brand.
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 satisfied request.
Experts said the decision to reject Coca Cola's acquisition will cost the world's largest soft drink maker the opportunity to increase its shares of China's juice market by more than 20 percent.
The company saw its business in china grew 19 percent in 2008 and has listed China as its third largest market in the world.
We will now focus all of our energies and expertise on growing our existing brands and continuing to innovate with new brands, including in the juice segment, Kent said.
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.
Source: Xinhua
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