The proposed sale of Dole Foods’ fresh vegetables division to Fresh Express, a subsidiary of US-based Chiquita, has been halted, following preventative action by US regulators. The original agreement between Dublin-based Dole Foods and Fresh Express, which was set to be around €271 million ($293 million), was initiated in January of the previous year and was awaiting regulatory approval when discontinuation occurred.
Despite Dole’s assertion that the transaction would have increased competition and instigated a chain of benefits for all parties involved, the company expressed confidence in the possibility of an alternate solution benefitting their fresh vegetables division’s stakeholders and their shareholders.
With the deal being voluntarily terminated, neither party is obligation to pay a termination fee. In recent years, regulators in the US have cultivated a stringent approach towards mergers and acquisitions, possessing the potential to stifle competition and curb consumer choices. An instance of this was seen earlier this month, as the proposed multi-billion-dollar merger between JetBlue and Spirit airlines was scrapped subsequent to the US Department of Justice’s lawsuit against the merger.
US regulators considered the termination of the Dole-Fresh Express deal to be a preservation of competitive prices and product availability in the kitchen essentials category. Assistant attorney general of the US, Jonathan Kanter, remarked in a released statement that the potential merger threatened to increase grocery prices for staple products, consumed by an overwhelming 85% of American consumers, due to reducing the competition landscape from three to two.
According to the Department of Justice, yearly spending on packaged salad by customers and grocery chains amounts to an impressive $3.2 billion.
In 2021, the fresh vegetable division of Dole reported earnings of $1.3 billion as it declared its sale. Housing agricultural practices and four production facilities within the USA, the business employed over 3,000 staff at that point.
Established post an acquisition of Dole Food Company by Fyffes spin-out Total Produce, Dole has grown to become the world’s top provider of fresh produce and is guided from its base in Dublin, Ireland.
The company’s early afternoon stock in New York surged by 1% to $11.78, pushing its market value to almost $1.2 billion.
During the announcement of the fiscal results for Dole in 2023, Chief Executive Rory Byrne stated that there has been an ongoing enhancement in the core performance of the fresh vegetables division.