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European Commission grants Chiquita

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On Friday, the European Commission announced that it had allowed a conditional approval to the proposed merger of Chiquita Brands International Inc. ( NYSE:CQB) with Irish fruit grower Fyffes PLC ( LON:FFY) (OTCMKTS:FYFFF). The conditions set out include that Fyffes end its exclusive relationship with shipping company Maersk and secondly, both companies are obliged to commit not to make any exclusive deals with shipping companies or provide firms with incentives to refuse to ship their competitors' fruit.


As of October 3 rd, the list of companies awaiting approval for combination by the European Commission remained long with just a few already approved including but not limited to;


S. fruit firm Chiquita Brands and Irish rival Fyffes to merge (approved Oct. 3) S. social network Facebookto buy mobile messaging startup WhatsApp (approved Oct. 3) S. drug manufacturer Eli Lilly to acquire Swiss peer Novartis's animal health business (approved Oct. 3)

With Chiquita shareholders expected to vote on the merger at a special meeting on October 24 th, Investigations into the Chiquita Brands International Inc. ( NYSE:CQB)-Fyffes PLC ( LON:FFY) (OTCMKTS:FYFFF) merger showed that the merger would become the world's largest banana company. However, this will not affect competition in the European Union since consumers have a plethora of other banana suppliers to purchase from.


The European Commission in a statement expressed other companies within the same industry did not encounter key obstacles growing their businesses or penetrating neighboring geographic markets.


A serious risk of potential shutting out or limitation of competitors, access to shipping services was however pointed out and the matter was addressed by Chiquita Brands International Inc. ( NYSE:CQB) and Fyffes mitigated that risk commitment not to enter into exclusive shipping rights contracts.


This merger began back in March when Chiquita Brands International Inc. ( NYSE:CQB) agreed to acquire Fyffes PLC ( LON:FFY) (OTCMKTS:FYFFF) for just over $500 million in an all-stock deal.


The deal was however deferred, when Brazilian firms Cutrale Group and Safra Group offered to buy Chiquita for more than $600 million in August, a deal which Chiquita considered to be too low.


Chiquita finally delayed the vote on the Chiquita-Fyffes merger in September following a major shareholder adviser pressuring the company into talking with the Brazilian firms. This amounting pressure forced Fyffes to sweeten its part of the merger. And the two then agreed to a new merger procedure allowing Chiquita a larger share of the new combined company.


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