France rejected Coca-Cola Co.'s bid for Pernod Ricard SA's Orangina soda today for a second time, saying the purchase would give the world's largest soft-drink maker too much of the French market.

Coca-Cola said it will drop its $733 million bid and end its two-year pursuit of the orange-soda maker. The companies revised their agreement in May to try to allay France's concern that a sale would hurt competition.

Coca-Cola said it may still seek the right to sell Orangina in other nations. France's rejection is the latest setback in Europe for Coca-Cola Chairman M. Douglas Ivester, including a recall of contaminated drinks that hurt profit for two quarters and a European Union antitrust investigation. Europe is Coca-Cola's No. 2 market after North America.

"Coca-Cola was going to take a brand with enormous equity and leverage it worldwide," said analyst Skip Carpenter at Donaldson, Lufkin & Jenrette Inc.

Coca-Cola's shares rose $1.25, to $67.93 3/4, on the New York Stock Exchange. Its shares have surged about 40 percent, from a low of $47.31 1/4 in October, on optimism overseas sales will rebound, though the stock still trades below a high of $88.93 3/4 reached in July 1998.

Pernod, the world's fifth-largest liquor maker, wanted to use the proceeds from Orangina's sale to focus on more profitable alcoholic drinks to compete with industry leader Diageo PLC.

The Paris-based company said it will now reconsider plans to expand in the spirits market. It makes Wild Turkey bourbon and Jameson and Clan Campbell whiskeys and has put its Yoo-Hoo chocolate drink up for sale.

"This decision deprives [Orangina] of legitimate ambitions and considerable means of development on the world market," Thierry Jacquillat, managing director of Pernod Ricard, said in a statement.

Orangina would have given Atlanta-based Coca-Cola 70 percent of France's market for carbonated, nonalcoholic drinks and almost 60 percent of such drinks sold in public places, French officials said.

"Soft-drink brands of real quality and depth are rare, and Orangina had that," said Tom Pirko, president of BevMark LLC, a New York-based industry consulting firm. "Orangina appeals to older, more sophisticated consumers."

Coca-Cola, to ease competition concerns, agreed in May to allow another company to distribute the orange soda to French hotels and restaurants for a decade. It also cut the price from the first offer of $838.6 million.

France's competition board reviewed the proposal and advised the finance ministry to block the agreement a few weeks ago.

Coca-Cola will later hold talks with Pernod about buying the rights to sell Orangina in countries other than France and "other issues," said Coca-Cola spokesman Rob Baskin.

French Finance Minister Christian Sautter said there's nothing to prevent Orangina from cooperating with Coca-Cola in other markets because the decision concerns sales only in France. "My decision is to conform to the advice from the competition council," Sautter said.

Coca-Cola had 59.2 percent of France's soft-drink market in 1998, according to Beverage Digest, a U.S. trade publication.

PepsiCo Inc., maker of Mountain Dew, had complained to French officials that Orangina would have given rival Coca-Cola 99 percent of France's market for orange soda and colas.

"France has again established itself as one of the world's foremost defenders of fair competition," said PepsiCo spokesman Jeff Brown. "Today's decision will help preserve choice and fair pricing for French consumers."

Coca-Cola wanted to expand Orangina's sales worldwide. It also planned to use Orangina's distribution network to better sell drinks such as Sprite and Fanta in France.

"Coke and Pepsi are trying to see how many niche drinks they can buy, be it root beers or orange drinks," said Jack Trout, president of Trout & Partners, a Greenwich, Conn., consumer-products industry consulting firm.

CAPTION: France's finance minister, Christian Sautter, speaks to the press about rejecting, for a second time, Coca-Cola's bid for Orangina.