Total Produce announced that its €260 million purchase of US rivals Dole will be held up by regulators from the EU until the end of this year, according to the Irish Times.
Total Produce’s chief executive, Rory Byrne told the Irish Times that at the company’s AGM it was revealed that the European Commission’s competition directorate was ‘taking longer than expected’ to approve the deal.
Holding Up Proceedings
The Irish fruit company announced the acquisition of the US food group back in February, and it originally expected the deal to be completed by mid-2018, and Byrne has said that the EU’s competition process was ‘burdensome’.
“It’s a very onerous process in terms of the level of information that the EU requires in order to get comfortable with the outcome that we are trying to achieve,” Byrne told the Irish Times.
Byrne highlighted that he and Total Produce’s advisors remain confident that the deal will ultimately be approved, which will open the doors for a group with combined sales of €8 billion.
The Irish Times reports that Total Produce has the option to buy Dole outright over five years, however since Dole owes its banks approximately $1 billion, the Irish group has decided against a complete takeover while it had such a large outstanding debt.
Total Produce Chairman Carl McCann told group shareholders that “it makes more sense to try to reduce that debt before we take it onto our own balance sheet”.
The US group is that biggest banana distributor in the US, selling 140 million boxes of them per anum, with annual revenues of around €3.9 billion.
If the deal is to be finalised, Dole’s 95-year-old chairman, David Murdock, will remain in his role while McCann will become its vice-chairman.
© 2018 Checkout – your source for the latest Irish retail news. Article by Aidan O’Sullivan. Click subscribe to sign up for the Checkout print edition.