This article refers to the Sino-French joint venture. For the Chinese holding company, please see Hangzhou Wahaha Group The Wahaha Joint Venture Company was a food and beverage joint venture company established between the Hangzhou Wahaha Group, the largest beverage producer in China, and Danone, one of the world's largest food conglomerates. The companies became partners in 1996 in a business model Forbes magazine hailed as a "showcase" joint venture. As the businesses expanded and became more complex, Danone made several attempts to buy out Wahaha, but was rebuffed. Danone and Wahaha's General Manager Zong Qinghou signed a deal in December 2006, allowing Danone to buy a majority stake in the non-JV operations. However, Zong had second thoughts about the deal and reneged, claiming the offer was underpriced. It is alleged that he wanted to squeeze a higher price out of Danone. In a trademark dispute, Danone filed for arbitration in Stockholm on 9 May 2007. Danone took further legal action by filing a suit in Los Angeles Superior Court against Ever Maple Trading and Hangzhou Hongsheng Beverage Co Ltd on 4 June 2007, companies controlled by Zong's wife and daughter. On 21 December 2007, Danone and the Chinese partner agreed to suspend their legal battle and resume negotiations. In 2009, Danone Group exited the joint venture by selling their 51% stake to Wahaha Group for an estimated $500 million. Background Founded in 1987, Hangzhou Wahaha Group Co. Limited was originally a sales company owned by the government of Hangzhou's Shangcheng District. From its creation, Zong Qinghou has led and grown the business, exercising control over the day-to-day operations. In 1995, Peregrine Investments Holdings introduced Zong to Danone, and discussions about joint ventures began. A joint venture agreement was signed on 28 March 1996. Major parts of the drinks business were injected into the joint venture, and Zong became its chairman whilst remaining the managing director of the holding and operating companies. In the melée of the company's transformation from a state-owned enterprise to a private company, Zong became an important minority shareholder. Joint venture holding structure The foreign partners took 51%, while the Chinese partners held 49% (of which WHH holds 39% and employees own 10%). Foreign partners' holding structure Groupe Danone and Peregrine together invested US$70 million in return for the stake in five joint venture WHH companies. The holding was held through a Singapore registered entity called