Coca Cola’s two-billion dollar takeover bid for Chinese juice company Huiyuan has been rejected. From the Wall Street Journal:
The decision by the Commerce Ministry Wednesday to block what would have been the largest-ever takeover of a Chinese company by a foreign buyer is also a major blow to Coke, which had hoped to parlay its high-profile sponsorship of the Beijing Olympics into greater commercial success in a critical market.
Lawyers and investment bankers said Beijing’s ruling — the first major test of a new antimonopoly law — undermines the government’s public opposition to protectionist barriers, which are getting heightened scrutiny amid the global recession.
The ruling sends “a very negative message,” said Lester Ross, an attorney in U.S. law firm WilmerHale’s Beijing office who wasn’t involved in the deal. “I think it was driven by protectionism, fueled by popular resentment against a foreign company acquiring a popular Chinese brand.”
