Partners Fight Over Wahaha in China

From The Wall Street Journal:

An escalating dispute between Groupe Danone SA and Hangzhou Wahaha Group Co. over China’s largest soft-drinks empire looks increasingly as though it could result in a breakup of their 12-year-old partnership, one of the country’s most prominent foreign joint ventures.

At stake is the business of making and selling bottled water, tea and fruit drinks under the name Wahaha, a brand more familiar to many Chinese than Coca-Cola. The disagreement has hurt both Paris-based Danone and Wahaha, which has headquarters in the city of Hangzhou just west of Shanghai. And each has taken recent steps to look past the relationship, including hiring separate investment advisers to estimate a value for the business.

Wahaha founder Zong Qinghou this month called for a speedy “divorce.” Danone executives, meanwhile, have played down the importance of Wahaha to their company’s bottom line, while highlighting new operations in China, such as a baby-food business.

July 28, 2008 6:52 AM
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