Coca-Cola’s bid for Huiyuan collapses after failing to gain Chinese approval
The China Ministry of Commerce (MOC) has declined approval for the proposed purchase of the leading juice maker Huiyuan by The Coca-Cola Company, who has since reported that it will not be able to proceed with the acquisition.”We are disappointed, but we also respect the MOC’s decision,” said Muhtar Kent, President and CEO of The Coca-Cola Company. “We put a tremendous effort into providing all the relevant materials to the MOC to ensure that they had all the information available and understood the transaction. We were looking forward to working with the excellent Huiyuan team to stimulate new growth for the Huiyuan brand.”
Mr Kent advised that the failure of the deal, while disappointing, would not harm their expansion plans in China. “We will now focus all of our energies and expertise on growing our existing brands and continuing to innovate with new brands, including in the juice segment. Our recently opened USD 90 million Global Technology and Innovation Centre in Shanghai will play a key role in bringing this innovation to life,” he commented. “We hold a long-term view of the China market, and are committed to ensuring that Chinese consumers have a wide variety of top quality beverage options available to them.”
Coca-Cola recently announced its commitment to invest US$2 billion in China over the next three years in new plant and distribution infrastructure, sales and marketing, and R&D. This is in addition to the US$1.6 billion already invested in China since the Company’s return in 1979.
A takeover of Huiyuan would have been the largest acquisition of a Chinese company by a foreign rival and would have made Coca-Cola the country’s largest juice maker, with an approximate 40 per cent market share.