Coke-Huiyuan Deal Still Under Review

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Mar. 10 – The Chinese government is still reviewing Coca-Cola Co’s bid to acquire China Huiyuan Juice Group under the new anti-monopoly law, the Commerce Minister Chen Demin said in a press conference at the sidelines of the ongoing annual parliamentary meeting.

Coca-Cola had filed the application for anti-trust approval in the country since December, according to Reuters. The case is being closely followed because it is the first major deal to come under the new anti-monopoly law that bans price-fixing and other forms of collusion that restricts competition.

Should the bid push through, Coke will buy Huiyuan at HK$12.20 a share – close to three times its HK$4.14 value prior to the deal. The bid is the biggest foreign buyout of a local firm at US$2.4 billion and would give Coca-Cola control of 43 percent of China’s fresh juice market.

Coke also announced that it will invest US$2 billion in the country in the next three years to build a new plant and distribution infrastructure. This includes setting up its largest innovation and technology center in Asia in Shanghai worth US$90 million.

“Our commitment and confidence in China never wavers,”  Muhtar Kent, president and CEO of Coca-Cola, said in a press statement.