Coke's Huiyuan bid hurdle political, not antitrust

Research reports by investment banks Merrill Lynch and J.P.Morgan noted huge uncertainty over whether Chinese regulators would approve the deal.

"China wants to establish more local brands, so it would be very difficult for the transaction to obtain approval from China's commerce ministry," said Xiang Liping, head of the securities department at Delta Asia Financial Group.

Donald H. Straszheim, Vice Chairman, Roth Capital Partners, was also sceptical, noting a regulation protecting what China calls "famous brands" from foreign acquisition.

"We believe this deal will be rejected by the Chinese authorities and will not go through," he said.

"The idea that Coke might have bought some more favorable consideration in business dealings in China as one of the 12 top worldwide partners of the Beijing Olympics we believe is of trivial significance." (Additional reporting by Fion Li in Hong Kong; Editing by Edmund Klamann)