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Coke’s FDI Mixer: Juice, Brand, Health, and Politics

There has been plenty of foreign direct investment (FDI) into China over the years, and it is continuing strongly (with the help of the RMB) despite lots of laws, regulations and rising costs, many of which have been reported on this blog.

The last time we mentioned big FDI [1], it was in relation to China’s new anti-trust (anti-monopoly) law , now it is the turn of Coke to shake things up – with their US$2.4 billion bid for Huiyuan Juice Group. MarketWatch reports:

In the context of China’s not inconsiderable challenges (especially in relation to high-profile, big bucks, cross-border M&A – see some here [2] and here [3]), Stan Abrams over at China Hearsay [4]notes a good point:

And political interest there may be, as Access Asia notes in their latest newsletter:

That sort of market share is unlikely to go unnoticed (even if, as the newsletter also points out, Coke will be aligning itself with the local health lobby). Nevertheless, this sort of thing is likely to be seen again and again, as China’s business landscape continues to be reshaped. Access Asia goes on to say:

It sounds like a good move, but we would not recommend popping the Champagne corks just yet. Perhaps just a can of cheap, brown, fizzy stuff for now.

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