Dublin-headquartered Dole Foods and Chiquita’s Fresh Express have ended negotiations for the Irish company to sell its fresh vegetables unit after US authorities moved to block the deal.
Dole “has agreed with Fresh Express Incorporated to terminate the previously announced agreement”, Dole said in a statement on Thursday. “This termination is the result of the US Department of Justice’s decision that it will pursue litigation to prevent the transaction,” it added.
Dole and US-based Fresh Express agreed the sale in January last year, in a deal then worth about $293 million (€271 million), pending regulatory clearance. The department of justice in the US though soon moved to investigate the deal.
“While Dole strongly disagrees with the department of justice’s decision and continues to believe that the transaction was pro-competitive and would have unlocked ongoing benefits to customers and consumers, we remain confident that we will have an alternative path forward in the near term that is in the best interests of the Fresh Vegetables Division’s employees, customers, and partners, and the Dole shareholders,” the company said.
Neither side will have to pay a break fee as a result of the termination.
The move is the latest by US regulators who have generally taken a tough line in recent years on mergers and acquisitions which could potentially reduce competition and customer choice. Airline’s JetBlue and Spirit called off their multibillion-dollar proposed merger earlier this month, weeks after the department of justice sued to block the deal.
After Dole and Fresh Express pulled the plug on the deal, the department said the move “preserves lower prices and availability for an essential kitchen staple.”
Chief executive Rory Byrne said the fresh vegetables business ‘has continued to see an improvement in its underlying performance’.
“This merger would have reduced the number of competitors from three to two and raised grocery prices for food products that are purchased by 85 per cent of American households,” assistant attorney general Jonathan Kanter said in a statement published on the department’s website. “I am grateful for the tireless efforts of the Antitrust Division’s lawyers, economists, paralegals and professional staff who made this result possible,” he added.
Packaged salad represents $3.2 billion (€3 billion) in spending by grocers and their customers each year, the department added.
Dole’s fresh vegetables business had revenues of $1.3 billion (€1.2 billion) in 2021, when it initially announced the sale. The business had agricultural operations and four processing plants across the United States and employed more than 3,000 people at that time.
Dole is the largest supplier of fresh fruit and vegetables in the world. It was created after Irish-based Fyffes spin-out Total Produce acquired Dole Food Company in 2021 and is headquartered in Dublin.
The company’s shares rose 1 per cent to $11.78 (€10.92) by early afternoon in New York, giving it a market capitalisation of just under $1.2 billion (€1.1 billion).
At the time of Dole’s 2023 earnings announcement in January, chief executive Rory Byrne said the fresh vegetables business “has continued to see an improvement in its underlying performance”.
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