There I was just a few minutes ago, feeling all sympathetic to China being thwarted yet again by Western protectionism when, uh, the PRC returned the favor. About half a year ago, I discussed at greater length Coca-Cola wanting to buy China's largest juicemaker, Huiyuan. It needn't have wasted its time. From the Financial Times:
UPDATE: I neglected to mention pertinent history for those unfamiliar with the story. The US gave Chinese energy firm CNOOC the political run-around after it expressed interest in buying Unocal over dubious "national security" concerns. Rather than be subject to undue scrutiny, CNOOC dropped the bid. Also, Huawei Technologies' bid for 3Com was dropped after being subject to political point scoring described by a Huawei senior exec as "bulls--t."
China on Wednesday formally rejected Coca-Cola’s proposed $2.4bn takeover of the country’s leading juice maker on competition grounds. The decision represents a major blow to multinational companies seeking to make acquisitions in China. The planned deal, the largest ever foreign takeover of a Chinese company, was the first major test of the country’s revamped anti-monopoly regime that was given extra teeth last August.You could say that this decision is retaliation for then-US Trade Representative Susan Schwab singling out China for subsidies given to "famous brands" in the dying days of the Bush administration--something the PRC clearly intended Huiyuan to be in the future given its insistence that Coca-Cola give up the name after purchasing the concern. Yes, American football fans, it's like the city of Cleveland asking that the Browns name and brand remain in the city's hands after its then-owner split for Baltimore. What more can I say? This has become the International Protectionism Economy Zone.
China’s ministry of commerce said that allowing the deal to proceed would hurt small local juice companies, could have pushed up juice market prices and limited consumers’ choices. Huiyuan, which is listed in Hong Kong, boasts a 42 per cent share of the domestic market in pure fruit juices. The announcement follows an earlier report in the Financial Times that the regulator had demanded that Coke relinquish the China Huiyuan Juice brand after the acquisition. People familiar with the matter said the ministry’s thinking reflected wider worries in Beijing about the loss of a leading brand to a foreign company. The demand was regarded as a deal breaker because the US company offered to pay a huge premium on the basis of Huiyuan’s strong brand image...
MofCom’s decision is a huge setback to the selling consortium which comprises Zhu Xinli, Huiyuan founder chairman, who owns 36 per cent of the company and France’s Danone, which owns 23 per cent. Warburg Pincus, the US private equity firm, owns 6.8 per cent.
UPDATE: I neglected to mention pertinent history for those unfamiliar with the story. The US gave Chinese energy firm CNOOC the political run-around after it expressed interest in buying Unocal over dubious "national security" concerns. Rather than be subject to undue scrutiny, CNOOC dropped the bid. Also, Huawei Technologies' bid for 3Com was dropped after being subject to political point scoring described by a Huawei senior exec as "bulls--t."