Top Biz News

Wahaha resists acquisition

By Jing Ji (China Daily)
Updated: 2007-04-10 09:38

China's biggest beverage maker is firmly opposed to French food giant Group Danone SA's planned acquisition and may break up their ties, a top company official said.

Hangzhou Wahaha Group, in which Danone has a 51 percent stake, will not agree to the French firm's plan to buy its remaining assets for 4 billion yuan, Zong Qinghou, chairman of the Chinese beverage maker, said in an online broadcast on Sina.com, the country's most popular portal.

"Danone wants to buy our remaining companies that are not included in our joint ventures, and we are not consenting," Zong said.

Danone, the world's largest yogurt maker, set up five joint ventures with Wahaha in 1996 under an agreement that bars Wahaha from making products that compete with those produced by these ventures, or using the Wahaha brand without Danone's consent.

"We consider such provisions unfair, prohibiting us from making goods that are produced by the joint ventures while imposing no restrictions on Danone itself," Zong said.

Danone, according to Zong, has invested 1.5 billion yuan in the ventures with Wahaha and has made a profit of 3.8 billion yuan in them.

Danone was unavailable for comment, but said in a public letter to Sina.com that Zong's comments "are not in line with the facts".

Danone, famous for its aggressive acquisitions in the Chinese market, has so far bought stakes in at least seven leading Chinese food and dairy companies since it entered China in 1987.

It has stakes in Shanghai-based Bright Dairy & Food Co, Shenzhen Health Food Co, Guangdong Robust Group and Shanghai Aquarius Drinking Water Corp.