Biggest banana firm created in Chiquita, Fyffes deal

The deal, which was announced today (March 10), would benefit both businesses by increasing their geographical reach and growing distribution of their products, they claimed.

The new enterprise would, they said, create the world’s biggest global banana supplier, selling 160M boxes annually, and the leading fresh produce group, based in Ireland.

Both Fyffes and Chiquita Brands would continue after the transaction, they confirmed, with Fyffes becoming a wholly-owned subsidiary of ChiquitaFyffes.

The newly created entity, ChiquitaFyffes, would have a presence in 70 countries and a workforce of 32,000 people.

Biggest US melon producer​

The company would maintain its presence in packaged salads and healthy snacks and have a strong position in the melon and pineapple markets. It will be the biggest US melon importer and the third largest pineapple distributor in the world.

It would boast annual pre-tax profit of an estimated £128.4M. Under the terms of the deal, the combined equity value of both firms would be $1.07bn (£641.3M).

Subject to approval by the shareholders of Chiquita Brands and Fyffes and the High Court of Ireland, the transaction is expected to be completed before the end of this year.

Ed Lonergan, Chiquita's ceo, who will become chairman of the new entity, called the agreement a “milestone transaction”​. “We will maintain our brands, all of which are valued by both customers and consumers,” ​he said. “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.”​

‘Exciting opportunities’​

Fyffes executive chairman David McCann, who has been named as ceo of the ChiquitaFyffes, said: "This deal will be transformative and offer exciting opportunities for the new business. 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​."

The two companies said they expected the merger to deliver annual savings of £40M by the end of 2016 through sharing resources and cutting individual overhead costs. In particular, it would make their logistics and procurement operations more efficient, they said.

Leadership team​

The senior leadership team of ChiquitaFyffes will be: Tom Murphy, chief financial officer, Coen Bos, chief operating officer - Fresh Fruit, Brian Kocher, chief operating officer - salads & healthy snacks, Kevin Holland, chief administrative officer, James Thompson, chief legal officer, and Manuel Rodriguez, corporate responsibility officer. 

The senior executives will be located in corporate offices in Charlotte, North Carolina and Dublin, Ireland.

News of the merger coincided with Fyffes’ announcement of its annual results for 2013. The company reported pre-tax profit before depreciation flat at €40M (£33.3M) on total revenue up 6.3% from €1.02bn (£847.7M) to €1.08bn (£901.3M).

Profits had been hit by massive cost increases for fruit and unfavourable movement in exchange rates, it claimed. However, this had been partially offset by lower logistics costs and it welcomed organic growth in its banana business.