Advertise with fastmoving.co.za
 
 

World's biggest banana firm formed
World's biggest banana firm formed

World's biggest banana firm formed

FMCG SUPPLIER NEWS

Fin24/ Reuters - Mar 12th 2014, 11:21

Dublin - US fruit firm Chiquita Brands and Irish rival Fyffes, Europe's largest distributor, have struck an all-stock merger deal to create the world's biggest banana supplier. 

The global banana market is controlled by four multinationals, according to the United Nations: Chiquita, Fresh Del Monte, Hawaii-founded Dole Food Company and Fyffes.

With this $526m deal the new firm, ChiquitaFyffes, will grab about 14% market share and $4.6bn in annual revenues.

"The first three (companies) on a global scale are not too far away from each other, whereas Fyffes was a good deal smaller. Now a firm number one has been created, there will be some impetus for further consolidation in the sector," said David Holohan, an analyst at Merrion Stockbrokers in Dublin.

Chiquita and Fyffes sell 180 million boxes of bananas a year between them, versus 117 million for Del Monte and 110 for Dole.

Their merger is expected to generate operational pre-tax savings of at least $40m by the end of 2016.

The deal will be subject to review by competition authorities but, Holahan added, is unlikely to prompt burdensome regulatory demands because the two companies operate mainly in separate North American and European markets.

"I don't think competition is too big an issue with it," he said. "If Europe did require disposals, I don't think it would be a problem."

ChiquitaFyffes will have a market value of $1.1bn, with Chiquita shareholders owning about 50.7% of the combined company and Fyffes shareholders the remaining 49.3%, the companies said.

Fyffes shares leaped nearly 30% on Monday, bringing the shares, which had traded at about 10 times earnings prior to the announcement, roughly into line with its peers.

Chiquita shareholders will get one share of the new company for each share held. Fyffes investors will get 0.1567 of a share in the new group for each existing share, which values it at a premium of 38% over its Friday's closing price.

ChiquitaFyffes will be listed in New York, but domiciled in Ireland, bringing tax savings similar to US drugmaker Perrigo's acquisition of Elan last year.

Goldman Sachs and Wells Fargo Securities, LLC acted as financial advisers for Chiquita and its board and Lazard for Fyffes.
From Fin24.com  

Related News

Nestlé Waters teams up with Ocean Legacy for plastic waste clean-up
11/07/2019 - 09:44
Nestlé’s bottled water division Nestlé Waters, owner of Perrier and Vittel, says it will team up with Canada’s Ocean Legacy Foundation to help to clean up plastic pollution.

PepsiCo's decision to sell smaller cans pays off
10/07/2019 - 08:19
Beverage sales rise as new packaging strategy helps company attract more consumers.

Pick n Pay trials nude fruit and vegetable wall
01/07/2019 - 11:23
Pick n Pay has launched a ‘nude’ fruit and vegetable produce wall – a dedicated plastic and packaging-free zone in 13 stores across the country as part of a trial to measure customers’ readiness to switch from pre-packaged food to loose products.

Shoprite opens its first distribution centre in Botswana
13/06/2019 - 09:40
Shoprite Botswana recently opened its own world-class distribution centre (DC) in Taung, Gaborone.

Waitrose trials refill and bring-your-own containers scheme to reduce waste
05/06/2019 - 09:17
Waitrose has launched a new scheme where customers will be able to fill up or refill their own containers with a range of products as part of its ambitions to reduce waste.