The world’s biggest banana company: Fyffes and Chiquita to merge
Some banana news this morning. Fyffes and Chiquita, two of the world’s largest banana companies, have announced they’re combining.
Fyffes shares have rocketed an astonishing 26 per cent on the news.
Source: Google
The company will be named ChiquitaFyffes (best not to attempt that with a mouthful of banana), and will operate in more than 70 countries with a workforce of around 32,000. It'll sell more than 160m boxes annually.
The fruit distributors are targeting $40m in annual cost synergies from the deal, which they hope to close by the end of this year. The stock-for-stock transaction will see Fyffes valued at $526m (£314m), with the merger resulting in a combined equity value of around $1.07bn. ChiquitaFyffes will be a global banana and other fresh produce company with about $4.6bn in annual revenues.
It'll be listed on the New York Stock Exchange and headquartered in Ireland (where Fyffes is currently based). Both Chiquita and Fyffes will maintain their respective brands.
Fyffes shareholders will receive 0.16 ChiquitaFyffes shares for each Fyffes share they currently hold.
David McCann, Fyffes chief executive chairman, said:
This deal will be transformative and offer exciting opportunities for the new business. 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.
For many food producers this is a natural next step to meet the pressure to achieve cost efficiencies, improve shareholder returns and attract investment.Retailers have enjoyed strong negotiating positions over the last decade with food producers and these types of mergers are intended to help food producers to gain some parity on those negotations. As consumer confidence improves around the world, expect to see more of these types of mergers in the global food and drink sector.