The European commission announced on Friday, October 3rd that it had granted conditional approval to the proposed merger of Chiquita Brands International Inc (NYSE:CQB) with Irish fruit grower Fyffes PLC (LON:FFY) (OTCMKTS:FYFFF). The conditions include that Fyffes terminate its exclusive relationship with shipping company Maersk, and that both companies must to commit to make any exclusive deals with shipping companies or provide firms with incentives to refuse to ship their competitors’ fruit.

Chiquita Brands

Chiquita shareholders will vote on the merger at a special meeting on October 24th.

More on EU commission decision

The investigation of Chiquita Brands International Inc (NYSE:CQB)-Fyffes PLC (LON:FFY) (OTCMKTS:FYFFF)merger determined that the merger would create the world’s largest banana company, but it wouldn’t hamper competition in the EU as consumers could still choose from a reasonably large number of other banana suppliers. The commission also determined that other companies in the same market  did not face major obstacles expanding their business or entering into neighboring geographic markets.

The EU investigation did point out a “a serious risk of potential shutting out or limitation of competitors’ access to shipping services,” the commission noted in its statement, but continued to say that the commitments undertaken by Chiquita Brands International Inc (NYSE:CQB) and Fyffes mitigated that risk.

In a joint statement, the companies said the commitments should not materially impact the economics of the deal. Of note, the merger has now received all required regulatory approvals, but still must be approved by the High Court of Ireland and the shareholders of both firms.

Background on the Chiquita-Fyffes deal

Back in March, Chiquita Brands International Inc (NYSE:CQB) agrred to acquire Fyffes PLC (LON:FFY) (OTCMKTS:FYFFF) for just over $500 million in an all-stock deal. The deal was delayed, however, when Brazilian firms Cutrale Group and Safra Group offered to buy Chiquita for more than $600 million in August, which Chiquita initially rejected as too low.

Chiquita ended up delaying the vote on the Chiquita-Fyffes merger last month after a major shareholder adviser pressured the company into talking with the Brazilian firms, and eventually forcing Fyffes to sweeten its part of the merger.

Chiquita Brands International Inc (NYSE:CQB) and Fyffes PLC (LON:FFY) (OTCMKTS:FYFFF) then agreed to a new merger arrangement giving Chiquita a larger share of the new combined company.