Swordus Ireland Holding, a wholly-owned subsidiary of Sumitomo, will acquire all shares in the Ireland-based grower and distributor.
Sumitomo will pay £1.88 (€2.23) per share in cash to Fyffes’s shareholders, representing a 49% premium to the closing price of £1.26 (€1.50) per Fyffes share on Thursday (December 8) in London.
Fyffes’s shareholders will be paid a final dividend for the 2016 calendar year of €0.02 per share in cash, bringing the total amount to be received by shareholders to €2.25 per Fyffes’s ordinary share in cash.
The Japanese conglomerate – which imports 30% of Japan’s bananas – said Fyffes’s strong position as an international grower, importer and distributor made it a natural fit with Sumitomo’s organisation.
Fyffes chairman David McCann said the deal was a compelling proposition for its shareholders. It represented the value created by the company in recent years through strategic developments and the strong operating performance.
“Our employees, customers, suppliers and joint venture partners will benefit from Fyffes being part of an enlarged group with greater scale, reach and resources to broaden and accelerate delivery of Fyffes’s strategic objectives,” said McCann.
“We look forward to working with the Sumitomo team to develop and enhance our group’s strategy and to build on its long track record of successful growth.”
Sumitomo said it would be working closely with Fyffes’s management team to grow its current product offerings and expand globally.
Hirohiko Imura, managing executive officer of Sumitomo, said the company had been looking to acquire Fyffes for some time.
“Sumitomo Corporation has long admired Fyffes for its outstanding track record and market leading position. We are delighted that the Fyffes directors have unanimously agreed to recommend our offer to shareholders.
‘Impressive market position’
“We have significant experience in the produce sector and look forward to working with Fyffes’s executive directors, senior management and employees, customers and other stakeholders to strengthen Fyffes’s already impressive market position through continued investment.”
The acquisition still needs to be approved by Fyffes’s shareholders and the high court.
Based in Dublin, Fyffes is an international grower, importer and distributor of fresh produce, including: bananas, pineapples, and melons.
It now produces and distributes mushrooms, following the acquisition of Canada-based All Seasons Mushrooms in September.
Sumitomo Corporation consists of more than 800 companies and has been active in the banana industry since the 1960s. It operates plantations in the Philippines and retail distribution across Asia.