Danone and Wahaha merger hopes squashed

Last week Danone suggested merging Wahaha’s other businesses, but this week Wahaha rejected the plan. Talks that had been part of the now one month extended negotiations may have now come to their end.

Dow Jones Newswire reported (4 March) on Danone’s plans to suggest a merger between the joint-venture and the rival companies run by Wahaha Founder and Chairman Zong Qinghou.

Ownership of the Wahaha trademark and Danone’s allegations that Zong was illegally selling products that were identical to those sold by the joint-venture, is central to the dispute between the two beverage giants.

However, Wahaha has rejected the new merger proposal because it claims Danone wants to ensure at least 50 billion yuan ($6.9 billion) in market value if its shares in the new company are lower than 40%. Zong responded by saying that “those proposals and conditions are groundless, and we cannot possibly accept them.”

A peaceful resolution to the ongoing dispute now seems to be in jeopardy. In a report published by China Daily Zong added that he had no idea whether talks would continue.