Beijing, Mar.19: China has rejected Coca-Cola's plan to acquire beverage maker China Huiyuan Juice Group Ltd for 2.4 billion dollars, citing the country's anti-monopoly law.
According to a China Daily report, the acquisition would have been the largest ever buyout of a Chinese company by a foreign rival.
Chinese government sources were quoted as saying that had the planned takeover gone through, it would have violated the provisions of the Anti-Monopoly Law.
The Ministry of Commerce (MOC) said in a statement that it would have restricted competition and harmed the domestic juice industry.
"If the acquisition went into effect, Coca-Cola was very likely to reach a dominant position in the domestic market and consumers may have had to accept a higher price fixed by the company as they would not have much choice," the statement said.
The MOC launched an anti-trust investigation on Nov 11 to determine whether the acquisition would harm other rivals, consumer rights or technological innovation.
The bid was the first major deal to test the Anti-Monopoly Law, which took effect on August 1 last year.
If passed, the deal would have been Coca-Cola's largest overseas acquisition and the company would have been able to expand its dominant position in the carbonated drinks market to the juice market.
Huiyuan said yesterday that it respects the decision made by the ministry, and production would continue as normal.