The new ChiquitaFyffes will be largest supplier of bananas worldwide

The new ChiquitaFyffes will be largest supplier of bananas worldwide

Chiquita Brands International and Fyffes are to merge, the banana suppliers have announced this morning (10 March).

The stock-for-stock transaction will see investors in US-based Chiquita own around 50.7% of what will be called ChiquitaFyffes. Shareholders in Ireland's Fyffes will own the other 49.3%.

The two companies said the deal would create a company generating around US$4.6bn in annual revenue.

Chiquita CEO Ed Lonergan, who will be the chairman of the new business, said the "milestone transaction" would "create significant value" for the company's shareholders.

Lonergan said: "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. 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."

Fyffes executive chairman David McCann will take the role of CEO at ChiquitaFyffes. He called the deal "transformative" and added: "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."

ChiquitaFyffes, which will be listed in New York but based in Ireland, will be the "number one banana company globally" with a "signficant presence" in packaged salads, melons and pineapples. It will supply around 160m boxes of bananas a year.

The companies believe their geographical footprint and expanded distribution will help them "capitalise on the growing fresh food business and health and wellness trends".

Under the terms of the deal, Fyffes shareholders will receive 0.1567 ChiquitaFyffes shares for each share they hold in the Ireland-based firm. Chiquita investors will receive one ChiquitaFyffes share for each share they own in the US group.

The transaction values Fyffes at approximately US$526m and each Fyffes share at EUR1.22, which represents a premium of approximately 36% compared to the company's volume-weighted average trading price for the 30 trading days up until 7 March and a 38% premium to the Fyffes closing share price that day.

On that basis, the transaction will result in a combined equity value of approximately $1.07bn.