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Chiquita and Fyffes may make concessions to EU

September 16, 2014

NEW YORK (AP) — Chiquita and Fyffes say there may be some concessions made in their merger agreement to ensure that it is approved by European regulators.

The companies did not disclose the nature of the “limited commitments,” but said the changes won’t change the underlying reasons for a merger that would create the world’s biggest banana supplier.

The announcement Tuesday comes less than a week after Chiquita said it would open its books to a Brazilian investment group, which has offered to buy the banana company for $611 million. Chiquita initially rejected the offer last month.

The European Commission, which is reviewing the proposed tie-up, has extended that evaluation by 10 days after discussions with Chiquita and Fyffes, a fruit company based in Dublin.

Chiquita and Fyffes agreed to combine in an all-stock transaction in March. As part of the deal, Chiquita would move its headquarters to Ireland, where Fyffes is based, from Charlotte, North Carolina.

The maneuver is called an “inversion,” which would lower the company’s U.S. tax rate. There has been intense pressure out of Washington and a public backlash against such tactics. Critics say that moving the headquarters of U.S. companies overseas forces other taxpayers to carry a greater burden.

Another major U.S. corporation, Walgreen Co., ditched an inversion plan last month under rising political heat.

Chiquita and Fyffes say they hope to get regulatory approval by Oct. 3.

Shares of Chiquita Brands International Inc. were unchanged at $13.82 in afternoon trading.

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