China on March 19, 2009 denied that trade protectionism was behind its veto of a US$ 2.4-billion takeover bid of juice-maker Huiyuan by Coca-Cola. China’s decision on March 18, 2009 to reject Coca-Cola’s bid for Huiyuan shocked the business community, and shares in the Hong Kong-listed firm dived yesterday, at one point losing half their value. Analysts said China had used a new anti-monopoly law that took effect in August to reject the bid out of economic nationalism. But the decision on Wednesday, China’s commerce ministry said that if it had approved the acquisition, “consumers would have been forced to accept higher prices and a smaller choice of products”. If it had gone ahead, the deal would have been the largest-ever foreign acquisition of a Chinese company.
Reference
The Nation Friday, March 20, 2009
Monday, 23 March 2009
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This is a good example of government intervention. The government claims that intervention was necessary to protect the consumers' interests. I wonder who's interest the govt. is really looking out for?
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