Chiquita Brands signs deal to take over Irish fruit firm Fyffes

Chiquita Brands International, a US-based producer and distributor of bananas and other produce, has signed an agreement to acquire Fyffes, an Irish fruit distributor, in a $526m deal.

The transaction will lead to the formation of the leading global banana and other fresh produce company.

To be named ChiquitaFyffes, the new $1bn entity is expected to sell more than 160 million boxes of bananas each year, as well as maintain its presence in the packaged salads and healthy snacks category.

Additionally, the unit will also have a strong presence in the melon and pineapple market segments, noted Chiquita.

With a presence in more than 70 countries, ChiquitaFyffes will generate $4.6bn in annual revenues, and have a workforce of around 32,000.

The merger of Chiquita and Fyffes is in line with the strategic goals of both firms, including increasing shareholder value by combining businesses that deliver substantial operational efficiencies and cost savings.

Chiquita CEO Ed Lonergan said, "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.

"We will maintain our brands, all of which are valued by both customers and consumers."

Fyffes executive chairman David McCann said, "This deal will be transformative and offer exciting opportunities for the new business."

The parties expect the transaction to provide annualised recurring before tax overhead and operational synergies of around $40m by 2016-end.

Subject to certain customary closing conditions and regulatory approvals, the transaction is expected to close by the end of this year.

Following the completion of the deal, shareholders of Chiquita will own 50.7% shares of ChiquitaFyffes, with Fyffes’ shareholders holding the rest.

Lonergan will assume the role of chairman, while McCann will serve as CEO.

The combined company will be traded on the New York Stock Exchange (NYSE).

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Image: The new entity is expected to sell more than 160 million boxes of bananas each year. Photo courtesy of adamr at FreeDigitalPhotos.net.