After offering a surprisingly high premium for Huiyuan Juice, Coca-Cola might purchase Danone's equity in Wahaha cheaply, the China Securities Journal reported Wednesday.
A Groupe Danone spokeswoman refused to comment on the possibility of a sale of its equity in Wahaha to Coca-Cola, and a rumor that there are three potential buyers. She only confirmed that as one of the stockholders of Huiyuan Juice, Danone supported the sale of its equity.
With a 51 percent equity holding in the Wahaha joint venture, Danone is its biggest shareholder. It has previously accused Wahaha Group, the second biggest shareholder, of constantly abusing the Wahaha brand and its production process to the detriment of the interests of the joint venture and Groupe Danone. But in the relevant lawsuits Danone has always come out the loser.
It has been said that Danone planned to transfer its equity to Wahaha Group, but could not reach an agreement on the premium. Another rumor is that Danone proposed to reorganize the joint and non-joint ventures and then apply for a stock exchange listing, but was refused because of dispute on equity proportions.
After the two schemes fell through, a rumor surfaced that a third party, likely to be Coca-Cola, might buy Danone's equity in Wahaha.
(China.org.cn by Fan Junmei, September 25, 2008)