Coca-Cola should be thankful for Chinese protectionism.
Nearly two years ago, it made a $2.4 billion bid for China Huiyuan Juice. The deal would have been the largest foreign takeover ever of a Chinese company.
But it was blocked by Chinese regulators, a decision seen at the time as unreasonable hostility to foreign takeovers in Beijing. Thursday, in what seems like a postscript to a story from another age, French company Danone sold its 23% stake in Huiyuan to private equity group SAIF Partners for $260 million -- at half the price per share Coke was prepared to pay.
Coca-Cola, then, has ultimately escaped what could well have been a substantial overpayment for Huiyuan. Coke's original Huiyuan bid was made just before the collapse of Lehman Brothers: Six months later, when it was blocked, the world was a different place.
Since then, Coke's firm commitment to organic growth in China has served it well: Last year, through its existing holdings, it raised its share of China's fruit juice market by sales volume to 13.8% from 13.1% in 2008, according to data from Euromonitor. Second-place Huiyuan saw its share fall back to 7.3% from 7.5% meanwhile.
Huiyuan arguably lost much more from Beijing's actions. Sales last year were hardly up from 2008, and its gross margin is at levels seen in 2007. A tie-up with Coke, though, could well have provided Huiyuan with the added expertise needed for a real sea change in its fortunes.
As for Beijing's overall approach to large foreign takeover bids now, it's hard to say what that is. Straitened times for Western companies means no major deals have emerged to provide a new test case for China's monopoly laws.
Perhaps, by the time the next one does come, some lessons will have been learned about the benefits of openness.
Bloomberg News可口可乐公司在中国市场实现了有机增长的承诺。接近两年前，可口可乐提出以24亿美元收购中国汇源果汁(China Huiyuan Juice)。这桩交易如果成功，本来会是最大一桩外国公司在华并购交易。