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Beverage markets await decision on Coca Cola deal

By Zhou Yan (China Daily)
Updated: 2008-09-05 06:58

As for Huiyuan, analysts said that the company would also reap great benefits from the pending transaction, thanks to the rather attractive price offered by Coca-Cola.

"It's a good deal for Huiyuan, as a private company it has met a growth bottleneck due to a lack of financial support from banks and the government, " Qu said.

Teng said that Zhu Xinli, the founder and president of Huiyuan, "couldn't say no to such a price from Coca-Cola, particularly when China's equity market is suffering such a lean period", Teng said.

But how successful Huiyuan will be after the acquisition largely depends on strategies devised by Coca-Cola's top executives based in Atlanta, who will probably make the same mistakes as other multinationals synergizing with domestic brands, Qu said.

In addition, the two companies have to surmount several obstacles ahead of their marriage.

As it is the first major deal after the country's anti-monopoly law came into force on Aug 1, this transaction will be a major test of the new regulation, said Zhang Tao, a lawyer from Shanghai Zhongtianxin Law Firm.

"Regulators will probably subject the acquisition to very stringent checks," Zhang said.

Coca-Cola said in a statement that the success of the deal is subject to the approval of China's antitrust authorities.

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