Coca-Cola offered to buy Huiyuan, China’s largest juice maker, for 2.3 billion U.S. dollars (17.92 billion Yuan) in cash on Sept. 3.
The Chinese Ministry of Commerce announced on Wednesday (March 18th, 2009) that Coca-Cola’s bid to acquire China Huiyuan Juice Group failed to meet the country’s anti-monopoly law. The ministry found the transaction may disturb market competition. According to the reviewers of the case, 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.
Coca-Cola applied anti-trust investigation to the Ministry of Commerce in September. The investigation was officially launched 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. 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. The Ministry of Commerce 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.