The company said the Public Investment Corporation's (PIC) opposition to a 1.2 billion US dollar bid for drug maker Adcock Ingram had little to do with commercial merits.
The state-run PIC, Adcock's top shareholder, on Sunday rejected a sweetened cash and stock takeover offer for the local drug maker from Santiago-based CFR, saying it wanted all cash.
The PIC's rejection of the offer is likely to derail the rare 12.8 billion rand investment tie-up between Chile and South Africa. It is also likely to raise concerns that Africa's top economy is not always welcoming to foreign investors.
"The impression created is that the criticisms levelled at four offer by the PIC have little to do with commercial merits and are instead intended to allow a local buyer to succeed over a foreign buyer," CFR Chief Executive Alejandro Weinstein said in a statement.
"The current approach appears to be driven by protectionism."
CFR is battling a counter offer for Adcock from local firm Bidvest.
Bidvest, a conglomerate whose businesses include car sales and catering, has gone straight to shareholders with an all-cash offer for a little over a third of Adcock.
The PIC is also Bidvest's top shareholder, leading to some speculation that the fund is behind the counter bid, something Bidvest's chief executive has denied.