China to review Coca Cola bid for juice maker

BEIJING, Sept 8 (AP) Coca-Cola Company will have to submit its bid to buy a Chinese juice producer for review under China's new anti-monopoly law, state television reported, setting up the first major test of the legislation.brCoca-Cola's $2.5 billion offer last week for China Huiyuan Juice Group Ltd. already has stirred nationalist opposition. Comments posted on Chinese Web sites criticised the sale as the loss of a leading company to foreign owners.brThe anti-monopoly law, which took effect Aug. 1, was welcomed by foreign business groups as a step toward clarifying commercial conditions in China. But Beijing has released no details of what companies must do to comply.brRegulators have yet to receive a request from Coca-Cola for approval to buy Huiyuan, state television said on its Web site in a report dated Sunday.brThis acquisition is a very big one. So when we receive the application, we will inspect it carefully in accordance with the Anti-Monopoly Law, a ministry spokesman, Yao Shenhong, was quoted as saying.brThe Commerce Ministry did not respond Monday to questions by phone and fax about the status of the proposed purchase. Coca-Cola did not immediately respond to a request for comment.brChina is the world's leading destination for foreign investment. But the purchase of established companies is still rare and politically sensitive. In July, the US investment fund Carlyle Group ended a three-year effort to buy a stake in a Chinese maker of construction equipment following regulatory resistance and public complaints about the sale of assets to foreigners.brBeijing stepped up scrutiny of foreign acquisitions of Chinese assets following Carlyle's bid for Xugong Group. The government enacted a rule last year requiring a national security review for foreign acquisitions in some industries, though there was no indication Coca-Cola might face that hurdle.brThe government's reaction to the Carlyle bid prompted US officials to express concern about how Chinese regulators were handling proposed acquisitions.brTaking over Huiyuan would give Coca-Cola a leading position in China's competitive beverage market. Huiyuan is the top Chinese producer of fruit juices and analysts estimate it has about 42 per cent of its market.brAcquisitions must undergo an anti-monopoly review if the company created by the deal would have revenue of 400 million yuan ($58 million) in China or 10 billion yuan ($1.3 billion) worldwide, according to a government notice Aug. 3.brThe law says purchases will be blocked if they hurt competition but gives no indication of what level of market dominance is deemed unacceptable.brRegulators have 30 days to issue a ruling after receiving a formal application for a merger or acquisition. But they also can decide to conduct further reviews that can extend that deadline by up to 150 days.brCoca-Cola's offer for Huiyuan comes at a time when global companies are eager to expand into China's thriving domestic market, where consumer spending is growing at annual rates of over 20 per cent.