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 .

At stake is the business of making and selling bottled water, tea and fruit drinks under the name , a brand more familiar to many Chinese than Coca-Cola. The disagreement has hurt both Paris-based and , 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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