China rejected
Coca-Cola Co.’s proposed $2.3 billion acquisition of China Huiyuan Juice Group Ltd., saying it would be “negative for competition” in the Chinese beverage market, Bloomberg News reported.
Coke’s acquisition agreement was one of the first major tests of China’s recently-adopted antitrust law, the Am Law Daily blog said. China's Anti-Monopoly Law came into affect in August 2008.
If the deal had gone through, Coca-Cola might have used its “dominant position” to drive up prices and limit competition, Bloomberg reported, citing the Chinese Ministry of Commerce.
Coca-Cola can appeal the decision, but won’t, Bloomberg said.
Skadden, Arps, Slate, Meagher & Flom, which has advised Coca-Cola on numerous recent corporate matters, had been counsel to the Atlanta beverage giant on the Chinese deal. Skadden partners Nicholas Norris in Hong Kong and Gregory Miao in Shanghai were lead advisers.
Some corporate attorneys had speculated in September that the Chinese government would approve the Coke deal because of the goodwill Coca-Cola had engendered in the country through its sponsorship of the Beijing Olympics and other factors.