Monopoly on Coke

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Coke’s juicy M&A plans have already been raked over in the press (and on this blog). But next it is likely to be raked over by Chinese anti-monopoly officials (amongst others). As AP reports:

    “Coca-Cola’s $2.5 billion offer…for China Huiyuan Juice Group Ltd. already has stirred nationalist opposition. Comments posted on Chinese Web sites criticized the sale as the loss of a leading company to foreign owners.
    The anti-monopoly law, which took effect Aug. 1, was welcomed by foreign business groups as a step toward clarifying commercial conditions in China. But Beijing has released no details of what companies must do to comply.

    ….”This acquisition is a very big one. So when we receive the [M&A] application, we will inspect it carefully in accordance with the Anti-Monopoly Law,” a ministry spokesman, Yao Shenhong, was quoted as saying.

    …Mergers must undergo an anti-monopoly review if the company created by the deal would have revenues of 400 million yuan ($58 million) in China or 10 billion yuan ($1.3 billion) worldwide, according to a government notice Aug. 3.

    The law says mergers will be blocked if they hurt competition but gives no indication of what level of market dominance is deemed unacceptable.

    Regulators have 30 days to issue a ruling after receiving a formal application for a merger. But they also can decide to conduct further reviews that can extend that deadline by up to 150 days.”

This one will fizz for a while. And we will watch.

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One Response to “Monopoly on Coke”

  1. Archive » FDI Fizz| China Business Blog Says:

    […] has been all over the blogosphere with its investment plans (we initially covered it here, last […]

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