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Coca-Cola's Huiyuan offer sparks concern
By Nie Peng (chinadaily.com.cn)
Updated: 2008-09-04 17:19
Coca-Cola's offer yesterday for Huiyuan Juice has caused worry at national brands being taken over by foreign firms. Although Huiyuan Juice was pleased with Coca-Cola’s $2.4 billion bid on Wednesday, most netizens polled by a major Chinese web portal opposed the deal. The world's biggest beverage maker intended to acquire Beijing-based Huiyuan for HK$17.9 billion, or HK$12.20 per share - almost triple Huiyuan's closing price of HK$4.14 last Friday. Huiyuan shares soared 164.3 percent Wednesday to close at HK$10.94. By Thursday afternoon, an online poll conducted by Internet portal sina.com had registered the participation of 108,754 netizens, with 89,169 or 81.99 percent of them opposed to the deal and 90,106, or 82.85 percent, suspecting the move could remove one more of China’s home-grown name brands. Only 23,992, or 22.06 percent, of those polled were optimistic about Huiyuan's outlook after the acquisition, and as many as 65,615, or 60.33 percent, of the netizens showed a pessimistic attitude. In a news release on its website on Wednesday, Coca-Cola said it "is seeking to further develop its beverage business” through the acquisition, “with the objective of offering consumers a wide range of beverage choices". "Huiyuan is a long-established and successful juice brand in China and is highly complementary to the Coca-Cola China business," said Muhtar Kent, president of Coca-Cola. Coca-Cola said it has accepted irrevocable undertakings from Huiyuan’s three shareholders for acceptance of the offers, in aggregate representing approximately 66 percent of the Huiyuan shares. The companies are awaiting approval from authorities to proceed with the deal. Brenda Lee, Coca-Cola's public affairs director, said the price was reasonable based on its own market research. But Sina’s poll showed 15.5 percent of the netizens said the price was reasonable with 45.95 percent regarding it as too low. Only 6.86 percent said the price was too high and the remaining 31.69 percent said they had no idea. Qu Bing, the head of public affairs of the Huiyuan Group in Beijing, was quoted by Thursday’s Beijing Morning Post as saying there was no dispute over the price as the announcement was jointly made by the two parties. The Huiyuan brand would not be replaced, Qu added. Coca-Cola also pledged to keep the Huiyuan brand and inject advanced technology into Huiyuan. Unlike the overwhelming disapproval voiced by netizens, insiders were divided on the deal. (For more biz stories, please visit Industries)
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