Coca-Cola offers $2.4B for Chinese company

Beijing-- Coca-Cola Co. has offered to buy China Huiyuan Juice Group Ltd., China's largest fruit juice firm, for $2.4 billion in cash.

The offer, if approved by the Chinese government, would mark a major acquisition by a U.S. company in China, Xinhua reported. The deal is part of Coca-Cola's effort to grow globally through acquisitions.

The report, however, said it was not clear if the offer would be approved, noting the Chinese government in July had rejected U.S. private equity company Carlyle Group's offer to buy Xugong Group Construction Machinery Co.

Mei Xinyu, a researcher at the Chinese Academy of International Trade and Economic Cooperation, told Xinhua Coca-Cola faces two difficulties.

"One is the large size of the two companies, which will raise concerns about monopolies. The second is that the brand of Huiyuan is considered to be protected as a famous domestic brand," he said.

Huiyuan, a Hong Kong-listed company, owns the Huiyuan juice business throughout China.

"Huiyuan is a long-established and successful juice brand in China and is highly complementary to the Coca-Cola China business," Coca-Cola President Muhtar Kent was quoted as saying.

Coca-Cola has been doing business in China since 1979, Xinhua said.

Copyright 2008 by United Press International.