Banana suppliers Chiquita and Fyffes to merge in $1.07 bn deal
11 March 2014
Chiquita Brands International Inc, the US-based fruit supplier, yesterday agreed to merge with its Irish rival Fyffes Plc in a $1.07 billion all-stock deal, creating the world's biggest banana supplier.
The new company, to be called ChiquitaFyffes, would hold 14 per cent of the $7-billion global banana market, and have annual revenue of $4.6 billion.
"This is a milestone transaction for Chiquita and Fyffes that brings together the best of both companies which, we believe, will create significant value for our shareholders and offer immediate benefits for customers and consumers worldwide," said Ed Lonergan, Chiquita's CEO.
Under the terms of the merger, Chiquita shareholders will get one share, while Fyffes shareholders will get 0.1567 of a share of ChiquitaFyffes for each share held.
Fyffes shareholders holding Fyffes shares representing 25.6% of Fyffes outstanding share capital have given commitments that they will vote in favour of the combination.
ChiquitaFyffes will be listed in New York, but domiciled in Ireland for tax purposes, and have a market value of $1.1 billion.
Chiquita shareholders will own about 50.7 per cent of ChiquitaFyffes, while Fyffes shareholders will own the remaining 49.3 per cent.
ChiquitaFyffes will have operations in more than 70 countries and a global workforce of approximately 32,000 people. Both companies expect to generate annual operational synergies of at least $40 million by the end of 2016, once the transaction closes before the end of 2014.
North Carolina-based Chiquita is a leading international marketer and distributor of bananas, salads, other fruits and snacks, which it markets under the Chiquita and Fresh Express brands.
With annual revenues of in excess of $3 billion, Chiquita employs approximately 20,000 people and has operations in nearly 70 countries worldwide.
Dublin-based Fyffes is a leading international marketer and distributor of tropical fruits, marketed under several well-known brands including Fyffes and Sol.
With annual turnover in excess of $1.5 billion, Fyffes has operations in Europe, the US, Central America, South America and Asia.
Lonergan said, "We will maintain our brands, all of which are valued by both customers and consumers. The combined company will also be able to provide customers with a more diverse product mix and choice."
"This deal will be transformative and offer exciting opportunities for the new business. We are looking forward to working with the Chiquita team to build a combined company which is well positioned to succeed in our highly competitive marketplace and which will create significant value for our shareholders," said, David McCann, Fyffes executive chairman.
The transaction requires regulatory approval, but both companies do not see hitting any hurdles since they operate in different markets.