Beijing vetoes Coke's bid for Huiyuan

Beijing blocked Coca-Cola’s US$2.53 billion bid for Huiyuan Juice Wednesday in the first test of China’s new anti-monopoly law, the South China Morning Post reported. The rejection shows Beijing’s willingness to protect the country’s homegrown brands, but also raises fears of rising protectionism. The Ministry of Commerce (MofCom) said the deal, which would have been the biggest foreign acquisition in China to date, was rejected because it would have been bad for competition in the healthy drinks sector. As rumors that the deal would be blocked proliferated yesterday, Huiyuan’s shares dropped 20% in the 13 minutes before the trading on the shares was suspended. MofCom made the announcement after Huiyuan’s stock was suspended, but some complained trading should have been suspended earlier to prevent stock speculation.