The European Union (EU) has cleared the ChiquitaFyffes merger on the condition that Fyffes ends its exclusive shipping deal with Maersk.
Fruit producer and reefer owner Chiquita announced a $1bn alliance with Irish rival Fyffes in March. The European Commission also directed both companies not to sign any other exclusive deals with shipowners for 10 years. Nor should owners be provided with incentives for refusing to carry their competitors’ fruit. Chiquita agreed to pay more than $500m for Fyffes in an all-stock deal to create the world’s largest banana company. The Commission found that the merger would not threaten competition in Europe because of the wide choice of importers still available. TradeWinds reported in March that shipping is set to play a key role in $40m annual cost savings lined up by the two companies. Executives say gains could come from reducing the number of vessels in operation, and by using containerisation and slow steaming. The pair ship around 160 million boxes of bananas per year. Chiquita formerly owned the so-called Great White fleet of reefers but it chartered the vessels back when they were sold to NYK and EastWind Maritime. Chiquita currently operates eight reefers of between 572,000-cbm and 627,000-cbm capacity, which were built in 1991 and 1992, suggesting they may be ripe for replacement. Brokers believe the company will seek further economies of scale by operating larger reefers in the future.