Chinese beverage producer Wahaha Group and French food giant Danone Group SA have failed to reach an agreement in talks that are set to drag on for another month.
Hangzhou-based Wahaha rejected a plan put forward by Danone, Zong Qinghou, Wahaha's chairman and founder, said on Sunday night.
Danone proposed the two companies merge their businesses to form a new venture that will eventually list on the A-share market. The two companies would each take a 40 percent stake in the new venture, with the remaining 20 percent as public shares.
If Danone's stake in the venture is lower than 40 percent, the French company wants to ensure the firm is worth at least 50 billion yuan in market value, Zong said.
"That proposal is groundless and unacceptable. This negotiation should be based on equality and mutual benefit," Zong, who is also an NPC deputy, said.
"I have no idea where the talks are going," Zong said.
Danone yesterday declined to comment on Zong's remarks.
The dispute has drawn government attention in both countries. It centers on ownership of the Wahaha brand and the legality of dozens of non-joint ventures set up by Zong. Danone controls 51 percent of the joint venture with Wahaha.
Danone last April said it would buy a 51 percent stake in the non-joint ventures for 4 billion yuan, but Zong rejected the plan. He claimed it was a malicious takeover bid as the companies had total assets of 5.6 billion yuan and profit of 1.04 billion yuan in 2006.
That set off a series of tit-for-tat complaints and lawsuits under both Chinese and foreign jurisdictions.
The two sides started talks before French President Nicolas Sarkozy visited China in late November, but they were fruitless. The Ministry of Commerce stepped in as mediator and the two sides said in late December they would return to the negotiating table.