NEW YORK CITY: Chiquita Brands International, the US fresh food giant, and Ireland’s Fyffes, said on Monday (Tuesday in Manila) they will merge to create the world’s biggest banana company.
The transaction will create a combined company valued at $1.07 billion (770 million euro) named ChiquitaFyffes, a fresh produce company with annual revenue of $4.6 billion, the companies said in a joint statement.
The all-stock deal values the Irish company at $526 million (379 million euros).
The combined company will become the leading global banana and other fresh produce company, with sales of more than 160 million boxes of bananas a year, they said.
The deal puts together two storied banana companies that began in the 19th century as modest suppliers and grew into global powerhouses.
Chiquita was founded by Captain Lorenzo Dow Baker, who in 1870 bought bunches of bananas in Jamaica and sold them for a profit in New Jersey.
Fyffes, founded in 1888 as EW Fyffe, Son and Co., launched the first fruit brand in the world in 1929 with its “Fyffes Blue Label” sticker on bananas.
“This is a milestone transaction for Chiquita and Fyffes that brings together the best of both companies,” said Ed Lonergan, Chiquita chief executive officer.
Chiquita is a leading global marketer and distributor of fresh food products, including bananas and packaged salads. Fyffes is one of Europe’s largest tropical produce distributors, mainly bananas, pineapples and melons.
Chiquita shareholders will own approximately 50.7 percent of the new company, with Fyffes shareholders owning the rest. The value of the transaction was based on the companies’ closing share prices on Friday and an exchange rate of one euro to $1.39.
ChiquitaFyffes will have an operating presence in more than 70 countries and a workforce of some 32,000 people.
Lonergan will serve as chairman of ChiquitaFyffes and David McCann, Fyffes executive chairman, will be chief executive.
“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,” McCann said.
The merger is subject to shareholder and regulator approvals. The companies expect it to close by the end of the year.
Chiquita and Fyffes predicted the tie-up of their complementary business would produce operational efficiencies and pre-tax cost savings of at least $40 million a year by the end of 2016.
The combined company will have more than 24,000 hectares of owned or leased operations in Central America.
They pledged to continue their commitment to sustainability and pro-environment concerns.
“ChiquitaFyffes will continue its environmental and social responsibility commitments, including adding additional organic, Fairtrade, GlobalGAP and Rainforest Alliance certified capacity,” they said.
The merged company will maintain the brands of each company.
Generations of Americans know Chiquita brand bananas, brought to life in 1944 by the glamorous Miss Chiquita animated banana, and portrayed live by models and personalities.
Fyffes has extended its ground-breaking oval Blue Label banana brand to Blue Label Pineapples and winter season melons.
The combined company will be listed on the New York Stock Exchange and based in Ireland.
Chiquita, based in Charlotte, North Carolina, posted a loss of $16 million for 2013, a sharp improvement after losing $405 million in 2012.