EU competition chiefs to review Fyffes-Chiquita deal
Published 19/08/2014 | 02:30
THE European Commission is to review the planned merger between banana giants Fyffes and Chiquita.
The EU's competition wing will examine the deal and is expected to make a decision on its approval on September 19.
The European Commission has 25 working days after a deal is filed for a first-stage review. It may extend that to 35 working days to consider either a company's proposed remedies or an EU member state's request to handle the case.
Most mergers win approval but occasionally the commission opens a detailed second-stage investigation.
Fyffes scored a major victory in the battle to merge with Chiquita last week after the latter's shareholders rejected a rival bid.
Fyffes and Chiquita agreed merger terms last March but on Monday of last week the Brazilian duo of Safra and Cutrale made a rival bid for Chiquita that seemed to dwarf the Fyffes offer.
The Chiquita board, however, has thrown its weight behind the Fyffes deal. In a statement, Chiquita said Safra and Cutrale's bid of $13 a share was "inadequate and not in the best interests of Chiquita shareholders". Instead, the board "remains committed to completing its transaction with Fyffes", they said.
The news is a filip to Fyffes, which was seen as out of the running after the Brazilians made their offer.
When the rival bid was made public, Fyffes shares fell by as much as 21pc, dropping back below the price before Fyffes announced the deal with Chiquita.
Safra and Cutrale are now considering their options.