Published March 10, 2014
Chiquita Brands International (CQB) and Irish fruit seller Fyffes agreed on Monday to a $1.07 billion merger, creating the world’s largest banana company.
The all-stock deal will create a new company, ChiquitaFyffes, with sales of more than 160 million boxes of bananas. Combined, the two fruit firms have 32,000 employees and about $4.6 billion in annual revenue.
Chiquita’s shareholders will own 50.7% of the new company’s stock upon completion of the deal. Shares of ChiquitaFyffes will be listed on the New York Stock Exchange and domiciled in Ireland.
Fyffes and Charlotte, N.C.-based Chiquita said the combined company, which would surpass privately owned Dole Food as the top supplier of bananas worldwide, will maintain offices in Dublin and North Carolina.
Chiquita jumped 15.6% to $12.53 shortly after the opening bell. Through Friday’s close, the stock was up 60.8% over the last 12 months.
Fyffes executive chairman David McCann will lead the new company as its chief executive. Chiquita CEO Ed Lonergan will serve as chairman of ChiquitaFyffes.
“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,” Lonergan said.
Lonergan added that the companies will maintain their current brands, while the new company will provide customers with a more diverse product mix.
In addition to its banana sales, the companies said ChiquitaFyffes will have a significant presence in packaged salads, melons and pineapples. They are targeting about $40 million in annualized pre-tax cost synergies by 2016.
The deal, which is expected to close later this year, could face some antitrust scrutiny from regulators. According to the United Nations, Chiquita, Fyffes, Dole and Fresh Del Monte Produce (FDP) account for more than 80% of the global banana market.
Chiquita and Fyffes both have long histories. Chiquita’s founding dates back to 1870, when Lorenzo Dow Baker brought Jamaican bananas to Jersey City, N.J.
During World War II, the company’s operations were brought to a standstill while its ships were used by the U.S. government. Chiquita expanded its footprint after the war, advertising its bananas using a cartoon banana named “Miss Chiquita.”
Fyffes was born in 1888 when Edward Wathen Fyffe sold bananas from the Canary Islands in London.