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Danone issued a brief announcement Friday evening, expressing strong dissatisfaction with Wahaha's on-line announcement, and reminding the Chinese company of the the deadline for solving the problem.

When commenting on the dispute, a spokesman for the Chinese Ministry of Commerce said that the ministry will handle the issue according to the country's existing rules and regulations on foreign acquisitions.

Chinese authorities have a delicate balancing act on their hands in trying to find a solution that both beverage companies can swallow. The spokesman says the ministry wants foreign investors to maintain their confidence in the Chinese market but must also protect the rights and interests of domestic enterprises.

Wahaha, which started off as a factory in a small school, has grown into a conglomerate that produces more than a dozen products including bottled mineral water, dairy products, and juice packs.

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