CHARLOTTE, N.C. — Chiquita Brands International, Inc. has agreed to acquire Fyffes, a Dublin, Ireland-based fruit and produce distributor, in an all-stock transaction that values Fyffes at approximately $526 million. The combination of the two companies would create the world’s largest banana company with about $4.6 billion in annual sales.
The new company, ChiquitaFyffes, will have an operating presence in more than 70 countries and a workforce of approximately 32,000 people. It will become the largest company in the global banana market with sales of more than 160 million boxes annually. Additionally, the combined company will maintain a significant presence in the packaged salads and healthy snacks category, and will have stronger positions in the melon and pineapple market as the No. 1 importer in the United States and No. 3 distributor globally, respectively.
The companies expect the combination to result in annual pre-tax savings of at least $40 million by the end of 2016, primarily through efficiencies in logistics and procurement.
“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,” said Ed Lonergan, chief executive officer of Chiquita. “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.”
David McCann, executive chairman of Fyffes, said the transaction will be “transformative,” and will offer additional opportunities for the new combined company.
“We are looking forward to working with the Chiquita team to build a combined company that is well positioned to succeed in our highly competitive marketplace and which will create significant value for our shareholders,” Mr. McCann said. “Our outstanding employees will benefit from working for a larger, more diverse business that 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.”
Under the terms of the transaction, Fyffes shareholders will receive 0.1567 ChiquitaFyffes share for each of their Fyffes shares, valuing each Fyffes share at €1.22, or about $1.69. The transaction terms represent about a 38% premium to the closing price of Fyffes on March 7.
Once the transaction is completed, Chiquita shareholders will own 50.7% of the combined company and Fyffes shareholders will own about 49.3%.Mr. Lonergan will be chairman of the combined company, while Mr. McCann will become c.e.o. Other members of the senior leadership team will include Tom Murphy, chief financial officer; Coen Bos, chief operating officer — fresh fruit; Brian Kocher, c.o.o. — salads and healthy snacks; Kevin Holland, chief administrative officer; James E. Thompson, chief legal officer; and Manuel Rodriguez, corporate responsibility officer.