Dole plc has cancelled the sale of its fresh vegetables unit more than a year after announcing the deal with the parent company of Fresh Express.
In January last year, Dublin-headquartered Dole said it had agreed to sell the US veg division to Fresh Express, a subsidiary of Chiquita Brands International, for $293m.
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The transaction was subject to regulatory approval in the US, which has seemingly not been granted by the US Department of Justice (DoJ).
In a statement today (28 March) Dole said both parties had agreed to “terminate” the transaction.
“This termination is the result of the US Department of Justice’s decision that it will pursue litigation to prevent the transaction,” the statement read.
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It added: “While Dole strongly disagrees with the Department of Justice’s decision and continues to believe that the transaction was pro-competitive and would have unlocked ongoing benefits to customers and consumers, we remain confident that we will have an alternative path forward in the near term that is in the best interests of the fresh vegetables division’s employees, customers, and partners, and the Dole plc shareholders.”
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By GlobalDataJust Food approached the DoJ for a statement detailing its reason for rebutting the transaction.
In a reply, the DoJ said “the abandonment [of the transaction] comes in response to the department’s concerns about competition in the packaged salad market”.
In the statement citing Assistant Attorney General Jonathan Kanter of the anti-trust division, the DoJ said: “At a time when food companies are already overcharging Americans for groceries, today’s abandonment preserves lower prices and availability for an essential kitchen staple.
“This merger would have reduced the number of competitors from three to two and raised grocery prices for food products that are purchased by 85% of American households.”
North Carolina-based Chiquita Brands International is a subsidiary of parent company Chiquita Holdings.
The former is a global supplier of bananas and pineapples under the Chiquita name. Fresh Express, meanwhile, produces fresh vegetables and packaged salads under its own brand, with both companies marketing products in the US.
Dole plc was formed in 2021 through the merger of Dole Food Co. and Ireland’s Total Produce.
Dole’s US division in question, supplies a range of fresh veg, from lettuces to artichokes, sprouts and radishes. Revenue generated in the year to 31 December 2021 amounted to $1.28bn, according to a statement issued in January last year.
The business has agricultural operations and four processing plants across the US and employs more than 3,000 people.
Jose Luis Cutrale Jr., Chiquita Holdings chairman, said at the time: “With this transaction, we want to combine our best practices across food safety, freshness of produce, mechanisation, automation and innovation to offer rapidly expanding choices of safer and healthier produce products to the consumer.
“This combination will ultimately help drive growth in the entire produce industry and support higher demand for our valued produce grower base in California, Arizona, Colorado, Florida and across the entire USA.”
Today’s statement from Dole did not include a comment from either Chiquita Brands International or Chiquita Holdings. Just Food has asked the company for its comment.
