Chinese government cans Coke's purchase of Huiyuan

The Chinese government yesterday used its anti-monopoly law to put a stop to the Coca Cola Company's proposed purchase of Huiyuan Juice. The Ministry of Commerce (Mofcom) said that the acquisition could cause problems for smaller companies in the drinks sector and lumber consumers with higher prices and limited choice.

If the $2.4 billion deal had been approved, it would have been the largest ever China-inbound M&A transaction.

"We are disappointed, but we respect (Mofcom's) decision," said Muhtar Kent, Coke's president and CEO, in a statement.

Matthew Crabbe, managing director of market intelligence firm Access Asia, says Coke "will be frustrated that they have failed to shore up a large percentage share of the fastest growing segment of China's drinks market", namely juice.