Coca-Cola to buy Huiyuan to become China's as long as 198 days of marathon investigation and assessment, the Chinese Ministry of Commerce for the U.S. acquisition of Coca-Cola China Huiyuan Juice Group Limited (HKEx code: 01886, hereinafter referred to Huiyuan) antitrust review of the case finally reached the last three mm according to the Ministry of Commerce earlier days of the disclosure, on March 20 will be the deadline for approving the award.
Huiyuan Chairman Zhu Xinli for, this may be the most important life moments. uneasy, he and One executive close to the state-owned enterprises made a bet.
seems to be hedging psychological anxiety, Zhu Xinli, the most eager to bet the approved transaction, can be granted available on the website of the In discussing the new management team, have basically your marks out. to waiting for the final appointment. a week, for this passing a protectionist r l is associated with a very negative message. bilateral trade volume between China and other countries, shrinking, and, in general a step backwards to trade protectionism. , is the most talked about topics G20 summit. Zhu Xinli bet on the same day, the World Bank released a report entitled months, Antitrust Bureau, Ministry of Commerce, the first case to reject the way to show the world China's beyond the legal level, extends to the international economic and political fields, which may be unexpected decision makers.
slack when Zhu Xinli, the popularity of efforts to re-focus, stability, restructuring of the upstream and downstream channels to the time of Huiyuan, China Business Ministry officials also are trying to resolve the adverse effects caused by the decision. In China Development Forum, Minister of Commerce Chen Deming public response, saying that China actively quoted foreign policy remains unchanged, that restricting foreign investment in China will therefore, is big mistake Monopoly Law, This is probably include Zhu Xinli, Coca-Cola and the Chinese Ministry of Commerce of the parties, including the case do not want to see.
Then, from September 3, 2008 announcement of the deal to formally submit the anti-monopoly review of Coca-Cola material, then to the final decision, nearly 200 days in the long process, what is the role of the power cross, leading to a final decision caused huge controversy?
24 billion acquisition of shock
trend of public opinion that increasingly fermentation, Huiyuan is not Zhu Xinli, one belongs to his , and it can not escape the public eye.
2008 年 9 1, at, listed Huiyuan, just a year and a half before the market opened suddenly suspended, said the company is conducting a deal. Two days later, Huiyuan announced Coca-Cola Company has 66% equity interest held by the three major Huiyuan shareholders of China's Huiyuan Juice Holdings Co., Ltd., Danone and Warburg's Gourmet Grace Kim HK 12.20 per share offer made. As trigger a full takeover bid, the total amount of the acquisition 17.9 billion Hong Kong dollars (about 2.4 billion U.S. dollars).
the offer, compared with the previous day's closing price of Huiyuan 4.14 Hong Kong dollars, a premium of nearly 2-fold, corresponding to up to 25.99 times earnings. If approved by will be the history of Coca-Cola The second-largest acquisition, is also the biggest foreign investment in China so far deal. the transaction side, the world's largest carbonated soft drinks giant, the other, it is well-known brand of Chinese juice.
According to AC Nielsen survey data, Huiyuan Juice hundred percent in 2007 and in the concentration of fruit and vegetable juice market share, respectively, 42.6% and 39.6% share of the leading position. While the Huiyuan business growth slowed the past two years, but the astonishing growth of China's fruit juice consumption market. Euromonitor forecasts that the next five years, Chinese fruit juice market will maintain a compound annual growth rate of 14.5%, to 2012, total consumption will reach 19.1 billion liters.
deal was announced the day of resumption of trading to 10.94 Hong Kong dollar Huiyuan open, stock prices once turned to 11.28 Hong Kong dollars; finally close at 10.94 Hong Kong dollars, up 164.25 percent expires earlier, approved the transaction that the market is optimistic about the future.
up to 24 billion bid to help Coca-Cola of the other rival bidder, also shows the ambition of its determined to win. consumer market, reversing the global decline of non-carbonated beverage market is very important.
parties to the transaction is the market position and Coca-Cola 2.4 billion bid has aroused great public concern. In the absence of other channels for expressing the overall environment of public opinion in the role of the network channels of public opinion show a special status.
2008 年 9 on 3, the day the deal was announced, Sina.com that introduction of the . The results showed that eighty percent of Internet users opposed to the acquisition, Liu Cheng is more users are not optimistic about the future of Coca-Cola Huiyuan acquisition.
Earlier, a number of well-known consumer brands such as China, the U.S. and Canada net, Robust, small and nurses, were Foreign M & A experience, strong after a brief silence, Zhu Xinli began to speak on various occasions .2008 September 6, he was at headquarters in Shunyi, Beijing Huiyuan, a small press conference and issued the famous When the pig to sell where the drinks industry is fully competitive industry, the only possible obstacle to the deal is anti-monopoly review
and carbonated beverage market duopoly competition, the Chinese juice market is highly competitive. the country up to more than 4,000 manufacturers fruit drinks above-scale enterprises is probably more than 340 fruit and vegetable juices. hundred percent fruit juice into the juice market, the high concentration and low concentration in the three market segments, while the low concentration of the first two 2 times the total market. According to Euromonitor statistics, hundred percent in the high concentration and market share ahead of the Huiyuan juice, fruit juice market in the whole only about 8.5% of market share, ranking second; Coca-Cola is the concentration of products with a low success Maid ranked first, accounting for 11.8%.
2008 年 9 5 March, Sina invited Dacheng Law Firm Qian Wei Qing, president of advisory bodies and Jun Li Su, who venture online interviews, openly opposed the Coca-Cola acquisition of Huiyuan. Subsequently, another report said a number of beverage companies to prepare a joint letter expressed opposition to the Ministry of Commerce, and even proposed the sale of a radical program that will Huiyuan brand and net assets divested by the Chinese renminbi business organizations jointly fund the purchase or separately auction, to preserve the .
In fact, foreign M & A well-known changed several times, still not approved of. three years after the delay, the two sides to renounce the acquisition.
Previously, China has successively rejected or approved with conditions, a number of large M & A transactions involving foreign investment, but most of these blocked transactions occurred Heavy in iron and steel, etc. are considered monopoly review of .2008 August, China's newly established Anti-Monopoly Bureau; Aug. 1, also published in the month before the deal, China's data, Coca-Cola and Huiyuan's 2007 sales in China were 1.2 billion dollars (about 9.12 billion yuan) and 3.4 billion U.S. dollars (about 2.59 billion yuan), whether a single target or merger targets are reached and more than a Field severe test.
foreign mergers and acquisitions for the concern of this case as much as China, Sina User survey results are touchstone of attitudes.
Today, the Chinese Ministry of Commerce spokesman, some of the antitrust bureau in charge of mergers and acquisitions and the legal profession are clear to the outside world again and again, the final decision is purely a decision based on law, independent political, media and brand pressure. Academy of Social Sciences Wang Ye, an expert on anti-monopoly law that required antitrust review body if it is necessary to protect China's national brands, but also look after the interests of multinational corporations, but also to ensure that Chinese enterprises can not This can only be wishful thinking. Coca-Cola Huiyuan in fact transnational mergers and acquisitions and business level, to become the focus of public opinion at home and abroad; will inevitably be the interpretation of a variety of ways the outside world, including China's foreign investment M & A speculation policy.
New Hope
positive signal continuously release, ahead of Coca-Cola and Huiyuan opened the champagne early to determine the presence of former executives of Huiyuan candidates, the latter the face of surging network on September 18, Coca-Cola formally submitted to the Ministry of Commerce of China anti-monopoly review of application materials. Earlier, Coca-Cola hired three law firms were involved in different aspects of the review to provide legal advice and documents prepared.
a lawyers employed by Coca-Cola said, from the July 2008 negotiations began, law firms began to intervene. disclosure of information to prepare quickly, the real difficulty lies in the identification of the relevant market. Can antitrust review in China in this sector agree on, Coca-Cola did not fully grasp.
the so-called Huiyuan will not cause market monopoly, we must first determine that the market range. is a high concentration of pure fruit juice or fruit juice market and juice drink market, or the non-alcoholic beverage market? define the scope of these three statistics for the market share of a night and day Do not, and could also affect the decision whether or not monopoly.
professional drink Coca-Cola chose Ghana to the UK market research agency sub-company, involved in anti-trust review of the law firm of professional legal analysis and specially invited experts over antitrust economic analysis, the final report is expected to draw a more optimistic conclusion by examining the. Coca-Cola China, Deputy Director of Public Affairs and Communications Zhao Yan red to the Coca-Cola from the acquisition of this case the 2008 statistical report shows that China's beverage market, Coca-Cola and Huiyuan merger market share in the fruit juice to less than 20%. This means that it is a fully competitive market, none of the enterprises with independent market dominance status.
request of the Ministry of Commerce, Coca-Cola Company and 25 September respectively, October 9, October 16 and November 19, four of the application materials have been added. until November 20 Japan, the Ministry of Commerce announced the declaration of a formal filing review of Coca-Cola.
understand the review process a number of the legal profession, said the data provided by Coca-Cola, the Ministry of Commerce will use and reference; the relevant market and market share for the determination of the Ministry of Commerce anti-monopoly will control and collect according to their own evidence and analysis tools were measured, from the Commerce Department said later the situation, at this point, the two sides reached an agreement soon.
China anti-monopoly review, divided into % concentration of the mixed juices and juice drinks less than 25%. The reason is that fruit juice drinks and carbonated beverage alternative between the lower and the juice of three different concentrations of high between the demand and supply substitution of alternative sex.
This Coca-Cola and Huiyuan is a very positive signal, because, according to Euromonitor's 2008 market share data, Coca-Cola together all of its juice brand fruit juice market in China, the share accounted for about 11.8%; ranked Second, the Huiyuan 8.5%. the two share only 20.3% after the merger, and the % of market share, resulting m Herfindahl Hirschman Index (Herfindahl-Hirschman Index, referred to as the HHI) of about 552, less than 1000 in the United States and the European Union are likely to be no monopoly immediate conclusion priority and is expected to pass without further examination.
HHI is a market share of each competitor and the square. According to him, made any new acquisitions, the United States and the European Union is the first determination of the review of HHI values to determine whether the transaction would cause any regulatory body may need to carefully review the issue. Europe usually the threshold is set to 1000.
mergers and acquisitions in other countries provided the case for review body decision-making. This also saw Coca-Cola further approved the dawn.
2008 年 12 5 February, the Commerce Department anti-trust by the Secretary to accept the Chinese government is still out in the online network interview, introduced from 1 August 2008 This atmosphere of optimism, many mergers and acquisitions began to intensively promote the specific arrangements.
Huiyuan insiders, before the Spring Festival this year, Coca-Cola Huiyuan began planning for the new management team, in addition to continuing as chairman Zhu Xinli, the remaining charge will be borne by Coca-Cola assignment. In line with Coca-Cola on the appointment of new senior managers, executives chose to leave part of Huiyuan, Danone posted over Huiyuan business level management personnel, are also gradually withdrawn.
Jiliuyongtui of Zhu Xinli, the selected upstream to enter. Although no transfer of shares to get money, his wholly-owned non-listed companies Food and Beverage Beijing Huiyuan Group Co., Ltd., has signed with a number of local government cooperation agreement upstream investment, totaling more than 20 billion.
effect winter day in 2008, a group of Australians came to China, including the Australian Competition and Consumer Protection Commission (ACCC) before the main 席艾伦费尔斯 (Allan Fels). the purpose of their visit is to review with the Chinese anti-monopoly body peer exchange of experience.
young Chinese anti-monopoly officials who tried to counterparts from other countries in the world body to absorb nutrients, guiding them to grasp and apply the anti-monopoly of the legal tools.
served as senior officials of EU competition law enforcement, Irish Competition Authority, is now a U.S. law firm Orrick (Orrick, Herrington & Sutcliffe LLP) partner 泰德亨尼贝 in (Ted Henneberry), also in December 2008 to Beijing for the Sino-US anti- Monopoly Law Seminar. the seminar, Chinese counterparts amazing humility and ability to learn has left a deep impression.
only experience. Ni Beili case of the introduction, referred to the United States and the European Union General Electric, Honeywell merger of different ruling, also stressed that European competitors that the practice of over-protection business may be bad for consumers.
2001, the General Electric, Honeywell merger application was approved by the U.S. Department of Justice, but in the subsequent rejection of the European Commission was. The EU believes that GE could use Honeywell's advantages in the aviation equipment, and further expand their own plane engines of production, the two companies create or strengthen a dominant position in many fields, resulting in the aviation industry's monopoly.
most interested in the Chinese case, the ACCC rejected the 2003 acquisition of Berri's case Coca-Cola .2003 on November 25, ACCC issued a notice to reject Coca-Cola Amatil's acquisition of Australia's largest juice maker Berri's trading application on the grounds that: carbonated soft drinks and juice drinks as ; transfer effect consumer choice.
pile in the above two cases, the finds that the controversy has become a real barrier barriers Coca-Cola Huiyuan acquisition.
received a number of antitrust experts in the exchange business, a great influence by Berri case, then the ruling, the rejection of some ideas borrowed from ACCC.
Information Services Department, Ministry of Commerce in answer to the Australian fruit juice company M & A failure cases.
fact, as the pressure.
Coca-Cola and Huiyuan and their supporters who are trying to quell domestic opposition to public opinion; and collect all the materials and evidence to try to prove that the acquisition will not bring the field of Coca-Cola's monopoly in the Chinese juice , it will not destroy the brand of Huiyuan. However, keen to The Inspector (now Secretary) Guo Jingyi alleged corruption was M & A lawyer involved in legal services checked. The case has yet to conclude their investigation, the resulting uproar, so the officials directly responsible for approving silence.
variety of factors outside the club in the decision of the antitrust case against the review of Huiyuan can not easily end.
2008 年 12 20 December, Huiyuan takeover deadline for preliminary review. Coca-Cola did not receive focus is on centralized assessment of the impact caused by a variety of.
week later, the Ministry of Commerce held a hearing on fruit juice and beverage companies, Winbond, farmer spring, fruit juice and other business in hand, and China Beverage Industry Association, the list of those who were invited to . Huiyuan, a company executive told the In the hearing, most enterprises have expressed opposition to the merger.
not aware of Coca-Cola and Huiyuan, hard targets that can not be based on the factors to consider, for example, push the brand value and the dominant market position Coca-Cola has not been a positive action in this regard.
2009 年 2 9, Foreign Investment Management Division of the Ministry of Commerce Deputy Director Lin Zheying participating in a forum, do not openly expressed his concerns about Coca-Cola Huiyuan case, saying the acquisition of faces three major difficulties: the media hype over a certain Ministry of Commerce executive interference; acquisition of Huiyuan known national brand of late effects; to be the healthy development from the perspective of the entire industry to assess.
unfavorable signal, not a cause Coca-Cola and Huiyuan enough attention. after the Commerce Department had hoped to make a commitment to Coca-Cola and Huiyuan, eliminate possible to eliminate or restrict the negative impact of competition, and with the Coca-Cola Company conducted several rounds of talks, the Coca-Cola clear that the competition of the acquisition, limited period of time required in a solution, such as the acquisition will Department's concerns.
2009 年 3 18, the Ministry of Commerce made a final decision to ban Coca-Cola to buy Huiyuan Company. This became the August 1, 2008 China's > Previously, Antitrust Bureau, Ministry of Commerce received a total of 40 declarations from the concentration of business operators, in accordance with the law placed on file 29 cases reviewed, 24 cases have been concluded; which the exercise by the 23 cases, for together may have to eliminate or restrict the concentration of mm-competitive effects Global beer giant InBev invested 52 billion U.S. dollars acquisition of peer Anheuser - Busch Companies, the Ministry of Commerce to discuss the post with the declaration of restrictive conditions attached to release.
Cola Huiyuan case, to be a hugely controversial decision.
supporters think this shows that China's Research Office, NPC Law Committee of the Legislative Counsel Antitrust already expected results Ye Wang, in her view, easy to form a monopoly, it did not pass this acquisition to ensure consumer choice, help maintain the competitive beverage market.
The noise seems to be more powerful. a big food company president, told the Coca-Cola to buy Huiyuan, as food and beverage industry itself need not belong to the state control of industry; and from the market point of view, different drinks have a great alternative, people need not worry about concentration or monopoly, a populist ; a lot of places do not complete, March 24 released a notice in much greater detail than the Ministry of Commerce of China Beverage Industry Association, citing data provided by finds Coca-Cola carbonated drinks market share in China, a market share of 60.6%, while in the capital, brand, management, marketing, competitive advantage has been made, so the carbonated drinks market has dominant market position.
Department of Commerce that the carbonated drinks and fruit drinks among alternative although not strong, they are both non-alcoholic beverages, is the close proximity of the two markets. The completion of the acquisition, Coca-Cola carbonated beverage dominance has been based on the further enhancement in the juice market and influence the competitive advantage, resulting in the superposition of combination effects, which may lead to anti-competitive effects of mm that restrict competition and thus harm the legitimate interests of consumers drink. ;.
Finally, the Commerce Department finds that domestic mergers and acquisitions will be squeezed juice of small and medium enterprises survive, suppress domestic enterprises to participate in the juice market competition and the ability of independent innovation.
in the European Union, the United States and Ireland, and other countries have had anti-trust practice of U.S. lawyers Henny Berry, disagree on this interpretation. He stressed that the protection of the enterprise and consumer protection is not one thing, persons, but must harm consumers In juices, fruit juices and carbonated while acknowledging there is no significant substitution effect, this part of doing well on the ground is also very good. but then he can come to a dominant position in the absence of substitution effects are passed between the two markets, which have a middle significant fault, there is self-contradictory. pure fruit juice and high concentrations of the juice market with a dominant position in the fruit juice market, less than 10% market share, and Berri in the Australian fruit juice market, 50% of the market position should not be equated. Even more critical is that the history of the international spring proposed beverage market products highly fragmented, competition is very full, and there is no industry standard or customary legal barriers restricting market access, Professor Huang Yong, the analysts believe that the acquisition of Honeywell in the general case, the EU and the U.S. very different conclusions, is that related to law enforcement often lies in an idea.
Henny Berry, says that China's approach very much like Europe, if a company is too strong, the authorities tend to protect the competitors. while the United States ...
