Coca-Cola's acquisition of China's Huiyuan Juice was blocked on March 18 by the country's Ministry of Commerce, which said in a statement that the deal would be harmful to market competition and violated antitrust law.
The Ministry - in a statement published on its website - claimed numerous ill effects could result from the deal, including that it could squeeze out China's small juice companies, and had the potential to push prices up for consumers and reduce diversity in products.
Huiyuan was the market leader in China's pure fruit juice market, and the deal, worth 2.4 billion US dollars, would have been the largest foreign acquisition of a Chinese company in history.
This was the first time that a transaction has been blocked on the grounds of creating a monopoly since the new Antitrust Law came into effect last August, which thus far has led to 40 cases of potential monopoly behavior being assessed, according to the Ministry.
In the statement, the Ministry said that it had entered negotiations with Coca-Cola and gave it an opportunity to alter the transaction in such a way as to make it permissible under the Antitrust Law.
But the Ministry said that the formula provided by the firm did not go far enough to limit negative impacts on the industry, thus the verdict to block the deal.
A few hours before the Ministry published its verdict, Huiyuan suspended its stock trading on the Hong Kong exchange. The suspension came shortly after the market opened, after Huiyuan's stock sank 19.4 percent in only 15 minutes of trading.
