The European Commission (EC) has today (30 August) approved, under the EU Merger Regulation, the acquisition of Dole by Total Produce.
The deal was originally announced on 1 February 2018, with Total Produce entering into a binding agreement to acquire a 45 per cent equity stake in Dole for US$300m.
According to the EC, regulatory approval is conditional on the divestment of Dole's Swedish bagged salad business Saba Fresh Cut AB, a disposal that Total Produce said would have "no material impact" on the strategic rationale or commercial value of the deal.
Swedish salad concerns
"The Commission examined the effects of the proposed transaction on competition in the markets for the supply of bagged salads, bananas, pineapples and other fresh fruit and vegetables," the EC stated.
"On the basis of its preliminary investigation, the Commission was concerned that the transaction would have significantly reduced competition in the market for the supply of bagged salads in Sweden. Only one other significant competitor, Salico, would have remained in this market post-transaction. As a result, the Commission was concerned that the combined entity would not have faced sufficient competitive pressure from this remaining player.
"The Commission found that no competition concerns would arise with respect to all other products where the companies' activities overlap, due to the presence of a sufficient number of alternative suppliers," the EC outlined.
To address the Commission's competition concerns, the companies offered to divest Dole's bagged salads business in Sweden, Saba Fresh Cuts AB.
These commitments fully address the Commission's concerns as they effectively remove the entire overlap between the companies' activities in the supply of bagged salads in Sweden.
"Therefore, the Commission concluded that the proposed transaction, as modified by the commitments, would no longer raise competition concerns in the EU. The Commission's decision is conditional upon full compliance with the commitments."