Top Biz News

Wahaha resists acquisition

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

Danone also owns a 22 percent stake in Beijing-based Huiyuan Juice Holdings Co, the country's largest fruit juices producer, making it the second-biggest shareholder in the Hong Kong-listed firm.

Last December, the French dairy maker formed joint ventures with China Mengniu Dairy Co, the country's biggest liquid milk producer, in which it holds 49 percent of the stake.

But some critics have accused the French firm of trying to create a monopoly in the Chinese beverage market and dumping its home-grown brands at local companies after buying into them.

In an online poll conducted by Sina.com, 91.68 percent of the 25,000-odd participants think Danone's latest move to acquire Wahaha is aimed at creating a monopoly in the Chinese beverage market.

"The government should work out regulations to protect domestic companies from malicious acquisitions," appealed Zong, a teacher turned entrepreneur.

Founded in 1988, Wahaha Group, based in East China's Zhejiang Province, has assets of 8.8 billion yuan and employs about 20,000 people.

The net profit of the company, which manufactures mineral water, tea, fruit juice and baby milk, increased to 2.2 billion yuan in 2006, while pre-tax profit jumped 48 percent to 3.2 billion yuan.