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.