China's Ministry of Commerce will hold a hearing on Coca Cola's $2.4-billion offer to buy China's largest juice maker Huiyuan, a local newspaper said Monday.
Domestic juice producers will jointly submit to the ministry three new acquisition plans for Huiyuan to replace the Coke deal, the Beijing Morning Post cited an unnamed source as saying.
Huiyuan can be split and sold to Chinese enterprises separately, or be purchased by a yuan-denominated fund jointly set up by domestic companies, according to the plans. Another proposal was to okay the Coke-Huiyuan union but retain the brand of Huiyuan and sell it to Chinese companies.
Xinhua's phone calls to the ministry were unanswered while no related information was published on its website.
Coca Cola said on September 3 it has offered to buy China Huiyuan Juice Group Limited, a Hong Kong-listed company that owns the Huiyuan juice business throughout China, for the equivalent of $2.4 billion in cash. If successful, it would be the second-largest acquisition in the U.S.-based company's history.
Three major shareholders of Huiyuan are said to have accepted the offer. They held approximately 66 percent of the Huiyuan shares. But the offer needs to be approved by the ministry according to the newly-issued Anti-Monopoly Law.
Huiyuan vice president Wu Yuqiang said Wednesday Coco Cola was still preparing to file an application to the Ministry of Commerce.
The ministry would conduct the antitrust review after receiving the application, with an attitude against monopoly but supporting "normal economic activities", according to ministry spokesman Yao Shenhong.
Some domestic companies had called on their fellows to "actively take part in the ministry's hearing on the purchase", said Beijing Morning Post.
The deal sparked widespread worries from the country's juice industry and ordinary Chinese.
Hou Yali, Beijing Shunxin Qianshou Fruit Beverage Co., Ltd., another leading juice maker in China, told press last week he was "shocked" to hear Coke's move and concerned about Chinese home-grown brands.
Nearly 80 percent of more than 450,000 polled online by the major portal Sina.com voted against the acquisition by Monday, while a similar proportion believed the deal would verge on a foreign capital's attempt to wipe out domestic pillar brands.
Meanwhile, Huiyuan president Zhu Xinli said selling his company was a normal business act conducive to the company, employees and consumers, denying Huiyuan was facing management difficulties or bottlenecks.
Huiyuan sold 1.3 billion yuan ($110 million) of juice in the first half of 2008, 5.2 percent down from a year ago. Its net profit rose 7.1 percent to 367 million yuan.
(Xinhua News Agency September 15, 2008)