BEIJING (AP) -- Coca-Cola Co. will have to submit its bid to buy a Chinese juice producer for review under China's new anti-monopoly law, state television reported, setting up the first major test of the legislation.
Coca-Cola's $2.5 billion offer last week for China Huiyuan Juice Group Ltd. already has stirred nationalist opposition. Comments posted on Chinese Web sites criticized the sale as the loss of a leading company to foreign owners.
The anti-monopoly law, which took effect Aug. 1, was welcomed by foreign business groups as a step toward clarifying commercial conditions in China. But Beijing has released no details of what companies must do to comply.
Regulators have yet to receive a request from Coca-Cola for approval to buy Huiyuan, state television said on its Web site in a report dated Sunday.
"This acquisition is a very big one. So when we receive the application, we will inspect it carefully in accordance with the Anti-Monopoly Law," a ministry spokesman, Yao Shenhong, was quoted as saying.
The Commerce Ministry did not respond Monday to questions by phone and fax about the status of the proposed purchase. A Coca-Cola spokesman in Hong Kong, Kenth Kaerhoeg, said the company will do "whatever it takes to facilitate this process" but declined to say whether it has submitted a formal application or comment on details of the review.
China is the world's leading destination for foreign investment. But the purchase of established companies is still rare and politically sensitive. In July, the U.S. investment fund Carlyle Group ended a three-year effort to buy a stake in a Chinese maker of construction equipment following regulatory resistance and public complaints about the sale of assets to foreigners.
Beijing stepped up scrutiny of foreign acquisitions of Chinese assets following Carlyle's bid for Xugong Group. The government enacted a rule last year requiring a national security review for foreign acquisitions in some industries, though there was no indication Coca-Cola might face that hurdle.
The government's reaction to the Carlyle bid prompted U.S. officials to express concern about how Chinese regulators were handling proposed acquisitions.
Complaints about possible security threats to the U.S. prompted a Chinese company to withdraw a bid to buy oil and gas producer Unocal Corp. in 2005. This February, a partnership of U.S. and Chinese investors dropped plans to acquire tech company 3Com, saying they failed to satisfy American authorities' security concerns.
Taking over Huiyuan would give Coca-Cola a leading position in China's competitive beverage market. Huiyuan is the top Chinese producer of fruit juices and analysts estimate it has about 42 percent of its market.
Mergers must undergo an anti-monopoly review if the company created by the deal would have revenues of 400 million yuan ($58 million) in China or 10 billion yuan ($1.3 billion) worldwide, according to a government notice Aug. 3.
The law says mergers will be blocked if they hurt competition but gives no indication of what level of market dominance is deemed unacceptable.
Regulators have 30 days to issue a ruling after receiving a formal application for a merger. But they also can decide to conduct further reviews that can extend that deadline by up to 150 days.
Global companies are eager to expand into China's thriving domestic market, where consumer spending is growing at annual rates of over 20 percent.
Coca-Cola, based in Atlanta, began doing business in China in 1979 and has spent heavily to win over consumers. It was a top sponsor of August's Beijing Olympics and tried to appeal to national pride with advertising featuring Chinese athletes.
But the growth of richer, more experienced foreign competitors in China has stirred nationalist opposition.
The popular Web portal Sina.com said 80 percent of some 229,000 people who responded to an online poll were opposed to letting Coca-Cola acquire Huiyuan. A comment posted on a Sina bulletin board Monday called Huiyuan president Zhu Xinli a traitor, while others threatened to boycott the brand if the sale went through.
Huiyuan has said it secured commitments by three large shareholders accounting for 66 percent of its shares to accept the Coca-Cola takeover.
On the Net:
China Huiyuan Juice Group Ltd.: http://www.huiyuan.com.cn/en
Coca-Cola Co.: http://www.coca-cola.com