In the ongoing Chiquita and Fyffes merger negotiations, the two companies on Thursday agreed that Chiquita Brands International Inc. would own 59.6% of the new entity, compared to the 50.7% in the previously proposed deal.
Under the new terms, Fyffes shareholders will get 0.1113 shares in the combined entity (ChiquitaFyffes) for each Fyffes share they hold, while Chiquita stockholders will receive one ChiquitaFyffes share for each Chiquita share they currently hold, when the deal is completed.
The aim is to see off a rival joint bid for Chiquita from the two Brazilian companies – multinational conglomerate Safra and orange juice giant Cutrale.
Board members from both companies unanimously approved the revised agreement.
A ChiquitaFyffes merger would create the largest banana company in the world, worth approximately $1 billion.
Chiquita’s September shareholder meeting regarding the Fyffes merger had been put off while the company sought talks with Safra Group and Cutrale Group on their hostile bid of $614 million. Fyffes granted Chiquita a waiver.
Ed Lonergan, CEO of Chiquita, said:
“We are pleased with the increased value that these enhanced terms for Chiquita bring to our shareholders. The Fyffes transaction is a natural strategic partnership that brings together two complementary companies to create a combined company that is better positioned to succeed in a highly competitive marketplace, while driving strong performance and value for shareholders as well as immediate benefits for customers and consumers worldwide.”
David McCann, Executive Chairman of Fyffes, described the Chiquita-Fyffes merger as a strategic and compelling move that would create the Number 1 banana company globally, whith synergies only possible by the two companies coming together.
Mr. McCann said:
“This revised binding agreement, along with the additional synergies recently announced, reinforces our conviction that the Combination is the value-maximizing opportunity for both companies’ shareholders.”
The new ChiquitaFyffes entity would be headquartered in Dublin in Ireland, where corporate tax is 12.5%, compared to 35% in the US, which has the highest company tax in the world.
In early trading in Dublin on Friday, Fyffes shares rose 2.8% to €1.10, giving the firm a market value of €327 million ($416.67 million).