In one of the first major tests of China's recently-adopted antitrust law, the country's government has rejected a $2.4bn (£1.7bn) bid by Coca-Cola to acquire Chinese beverage maker Huiyuan Juice Group.

If it had been permitted to proceed, the deal would have been the largest-ever takeover of a Chinese company by a multinational. The closely-watched deal saw Coca-Cola represented by Skadden Arps Slate Meagher & Flom, whose team was led by Nicholas Norris in Hong Kong and Gregory Miao in Shanghai. Huiyuan instructed Freshfields Bruckhaus Deringer.

China's Anti-Monopoly Law came into affect in August 2008. Broadly modelled on Western competition laws, the measure also takes into account proposed mergers' impact on "national economic development".

The Coke deal had been closely followed as an early indication of how China might interpret its competition laws.

The ministry expressed concern that a monopolistic Coca-Cola would use bundling and tying practices to exclude domestic competitors from the market.

In its statement, the Chinese Ministry of Commerce said: "If the acquisition of Huiyuan went into effect, Coca-Cola is very likely to take a dominating position in the domestic market and the consumers may have to accept the high price fixed by the company as they do not have more choices."

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For more, see Merger control: China's new anti-monopoly law.

Freshfields Bruckhaus Deringer on the Legal Week Wiki

Skadden Arps Slate Meagher & Flom on the Legal Week Wiki