SHANGHAI: The Chinese government has blocked Coca-Cola's attempted $2.4 billion (€1.8bn; £1.7bn) takeover of the China Huiyuan Juice Group, one of the country's biggest soft drinks manufacturers, over concerns it would limit competition in the market.

China is one of the few nations expected to see both its economy and advertising revenues expand this year, and it has been argued that both multinational and local firms have room to grow in the country.

However, according to the Ministry of Commerce, the acquisition of Huiyuan by Coca-Cola, which would have been the biggest foreign buy-out of a Chinese firm, would "squeeze out" smaller rivals, and result in "higher prices" for consumers.

While the government body stated that it had tried to promote a more restricted tie-up between the two firms that would have allayed its concerns, it argued Coca-Cola had failed to agree to such conditions.

Many observers believe that the decision to forbid the takeover could limit the number of future mergers and acquisitions in China, and even impact the efforts of Chinese firms to expand abroad.

Coca-Cola announced its intention to buy Huiyuan Juice Group in September 2008, and it plans to invest over $2bn in China over the next three years.

Data sourced from Wall Street Journal; additional content by WARC staff