China rejected the Coca-Cola | Debt Consolidation Loans

Ministry of Commerce of China yesterday rejected the offer Coca-Cola to purchase the largest national producer of juices Huiyuan Juice Group. Pre-transaction valued at 2.3 billion dollars and could become the largest in the history of a leading American manufacturer of soft drinks. Chinese officials have expressed fears that the Coca-Cola will take a dominant position in the market, and decided to support the small domestic companies that are in the midst of a global economic crisis, forced to fight for survival.

Chinese market is the planned Coca-Cola, one of the main places: last year its sales of juice in this country grew by 19%, while in the U.S. itself has fallen by 1%. In 2008, Coca-Cola controlled 52.5% of the market for soda drinks, while its main rival PepsiCo – 33%.The market for fruit and vegetable juice Coca-Cola takes 12% and hoped to increase its share through the acquisition of Huiyuan, which had 8.5% of the market. That would be a major breakthrough in the region and the company has brought tangible gains. It is projected that in 2009 revenues of China's juice market as a whole should grow by 20% to 97.1 billion yuan (14 billion dollars).

In September last year, Coca-Cola has received consent to deal with the major shareholders Huiyuan, but other participants in the Chinese market covered claims and demands of the government to protect them from more powerful foreign competitors. Ministry of Trade took several months to verify the transaction for compliance with new anti-monopoly legislation, enacted in August 2008. The experts warned at the outset, the possibility that the answer is great. «Part of the Chinese society insists on maintaining a well-known brands such as Huiyuan, although they do not meet generally accepted standards of competition, – told RBC daily economist at Oxford University, Linda Yue. – The Chinese market has always been difficult to penetrate, and the current solution does not facilitate access to it ».

Coca-Cola became the first foreign company to have suffered from the new Chinese anti-monopoly legislation. This document has previously been criticized by several international organizations including the European Union Chamber of Commerce. Last yesterday, called on Beijing to disclose the detailed explanation of the blocking of the deal and warned that foreign investors now have to be more careful.

Solution Chinese authorities seem to take into account not only legal but also political factors. «On the one hand, really could be a violation of the rules of competition and monopolization of the market by Coca-Cola, on the other – before the antitrust authorities to acquire the application has encountered strong opposition from other players, who were offering their options regarding the future of Huiyuan, of course , with their direct involvement – said a senior analyst RBC daily Avanko Capital Artiom Korsovsky. – An additional limitation of healthy competition for the asset is delivered price suggested by Coca-Cola for Huiyuan: it is three times higher than market capitalization. This did not allow other potential buyers to take part in the fight for an asset, as it would be contrary to the principles of economic expediency ».

VLADIMIR PAVLOV