US multinational Chiquita Brands International is to merge with Irish fruit firm Fyffes, creating what would be the world's largest supplier of bananas with combined annual revenue of around US$4.6bn.
According to a statement released by the two groups, the all-stock deal values Fyffes at about US$526m and is expected to result in Chiquita shareholders owning approximately 50.7 per cent of ChiquitaFyffes, while Fyffes shareholders will hold around 49.3 per cent of the newly merged company.
The merger is due to be completed before the end of 2014.
'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 chief executive officer.
'This is a natural strategic partnership that combines two complementary companies of long history and great reputations that have built upon an unwavering commitment to exceed our customers' expectations,' he added.
'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.
'We know Fyffes well and our shared heritage will help to ensure a smooth integration as we work to bring best practices across geographies and business units to achieve substantial operating efficiencies.'
Commenting on the deal, Fyffes executive chairman David McCann, said merging the companies would be 'transformative and offer exciting opportunities'.
'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,' he said.
'Our outstanding employees will benefit from working for a larger, more diverse business which offers opportunities for growth.
We believe we will be able to use our joint expertise, complementary assets and geographic coverage to develop a business that can run smoothly and efficiently to better partner with our customers and suppliers.”
Beneficial move
Among a number of strategic and financial benefits identified by the companies, the statement identified a number of areas in which the deal would ultimately improve shareholder value:
– Combining complementary businesses that provide substantial operational
efficiencies and cost savings
– Uniting two leading companies in the produce industry to enhance scale, scope and
portfolio diversity
– Leveraging greater global scale to better serve customers and reach new markets
– Generating significant cash flow and a more efficient capital structure
– Expanding sourcing ability in key production areas
– Commitment to shared purpose and sustainability
Chiquita shareholders will get one share of the new company for each share held and Fyffes investors will get 0.1567 of ChiquitaFyffes shares for each Fyffes share, after the deal is completed.
