| Wahaha urges state to bar Danone from buying units |
SHANGHAI, Apr. 11 -- The Wahaha Group is seeking government support to block Groupe Danone SA's proposed purchase of stakes in its subsidiaries, hoping that the state will protect a well-known domestic brand.
Hangzhou-based Wahaha, China's largest beverage maker, urged the government to investigate Danone, the world's largest yogurt maker, over its bid to acquire controlling stakes in Wahaha's subsidiaries, according to its statement yesterday.
The statement was issued on behalf the labor union of Wahaha, which agreed with Zong Qinghou, chairman of Wahaha, when he said the purchase is a hostile takeover.
Both Zong and Wahaha's employees have strongly rejected the bid by Danone, owner of 51 percent of a joint venture with Wahaha, which offered four billion yuan (US$519 million) to buy a 51 percent stake of Wahaha's subsidiaries.
The dispute came after Danone threatened a day earlier to step up legal action as Wahaha had breached a cooperation deal by producing competitive products using the Wahaha brand outside their joint venture.
Wahaha also asked the government to introduce a law as soon as possible to prevent hostile takeovers by overseas investors to monopolize China's food and beverage industry.
"We gain no contribution from Danone," said the statement. "Our request of rising wages was always rejected by Danone."
Danone invested 1.5 billion yuan into the joint venture and has earned 3.8 billion yuan in profit after 10 years of operations, said Zong.
Danone accelerated its expansion in the world's fastest growing consuming market by buying stakes in at least five leading industrial leaders over the past 20 years.
It owns a 20 percent stake in Shanghai Bright Dairy & Food Co and has formed ventures with China Mengniu Dairy Co, the nation's biggest producer of liquid milk.
Danone also has ventures with other partners including Shenzhen Health Food Co, Guangdong Robust Group, Shanghai Aquarius Drinking Water Corp and China Huiyuan Juice Group Ltd, the nation's largest maker of pure-fruit drinks.
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