The European Commission has cleared the proposed merger between Fyffes and its US banana rival, Chiquita Brands — removing any regulatory barriers to a deal being concluded before the end of the year.
“This regulatory clearance represents a significant milestone for our proposed transaction to create the number one banana company globally,” Chiquita CEO, Ed Lonergan said yesterday in a joint statement with Fyffes chief David McCann.
The two added: “We have worked closely with the European Commission to address any concerns and [this] decision reaffirms our confidence that the combination of Chiquita and Fyffes is a natural strategic partnership, one that is now assured of a clear timeline to completion before the end of the year.”
Both companies recently postponed shareholder approval meetings — originally due to take place last month, and then yesterday — to the end of October; the move giving time for Chiquita to talk to rival bidder, Brazilian player Cutrale-Safra.
Last week, the terms of the original Fyffes/Chiquita merger were altered, giving Chiquita a 59.6% (instead of 50.7%) share of the new entity, in an attempt to stave off the aforementioned rival deal. Chiquita had already turned down a $13 per share/$611m takeover approach from Cutrale.
A so-called ‘break free’ clause in the amended terms also means that Chiquita will pay around €23m — about two-thirds of Fyffes pre-tax profit last year — to the Dublin fruit distributor should their deal ultimately fail.
The Commission said that while a merger between Fyffes and Chiquita — any deal still needs approval from both sets of shareholders, as well as the Irish High Court — would create the largest banana producer in the world, it wouldn’t hamper competition in the EU.
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