Top Banana: Chiquita And Fyffe Announce Merger
On Monday, the Board of Directors of Chiquita Brands International (NYSE: CQB) and Fyffes unanimously approved a merger to create ChiquitaFyffes Plc, a global banana and fresh produce company with $4.6 billion in annual revenue. The transaction is expected to complete before the end of 2014.
- Currently, ChiquitaFyffes is a private limited company in Ireland with the name Twombly One Limited. This private company was formed for the purpose of implementing this transaction. ChiquitaFyffes will be a publicly listed company on the New York Stock Exchange.
- Ed Lonergan will serve as Chairman and David McCann will become the CEO for ChiquitaFyffes. Tom Murphy will act as the Chief Financial Officer, Coen Bos will be the COO of FreshFruit, and Brian Kocher will serve as COO of Salads & Healthy Snacks. Senior executives will be located in offices out of Charlotte, North Carolina and Dublin, Ireland.
- ChiquitaFyffes equity value is estimated at $1.07 billion.
- ChiquitaFyffes will have a workforce of 32,000 people in an operating presence of more than 70 countries.
- The stock-for-stock transaction is expected to result in Chiquita and Fyffes shareholders to own 50.7 percent and 49.3 percent, respectively, of ChiquitaFyffes.
- Fyffe shareholders will receive 0.1567 ChiquitaFyffes shares for each Fyffes share they hold upon completion of the scheme contemplated as part of the overall transaction. Chiquita shareholders will receive one ChiquitaFyffes share for each Chiquita share that they hold upon closing of the merger.
Benefits of Merger The press release states numerous strategic and financial benefits of the merger to increase shareholder value. These benefits include:
- Combining complementary businesses that provide substantial operational efficiencies and cost savings.
- Uniting two leading companies in the produce industry enhances scale, scope and portfolio diversity.
- Leveraging greater global scale to better serve customers and reach new markets.
- Generating significant cash flow and a more efficient capital structure.
- Expanding sourcing ability in key production areas.
- Commitment to shared purpose and sustainability.
Senior Executive Comments
Ed Lonergan, Chiquita's Chief Executive Officer commented, “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. 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. 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.”
Fyffes Executive Chairman David McCann wrote, “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. 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.”
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