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Fyffes and Chiquita to create biggest banana firm | |
(about 5 hours later) | |
Irish fruit firm Fyffes and US rival Chiquita are to merge to create the world's largest banana company, worth about $1bn (£597m). | Irish fruit firm Fyffes and US rival Chiquita are to merge to create the world's largest banana company, worth about $1bn (£597m). |
The new firm, named ChiquitaFyffes, is expected to sell about 160 million boxes of bananas annually, more than any rival. | |
"This is a milestone transaction for Chiquita and Fyffes that brings together the best of both companies," said Chiquita boss Ed Lonergan. | "This is a milestone transaction for Chiquita and Fyffes that brings together the best of both companies," said Chiquita boss Ed Lonergan. |
It will be listed in New York. | It will be listed in New York. |
In the merger, shareholders will receive shares in each firm, with Fyffes shareholders owning about 49.3% of the combined company. | |
Mr Lonergan said the deal would help it to save costs and expand the areas it served. | Mr Lonergan said the deal would help it to save costs and expand the areas it served. |
The tie-up came as Fyffes revealed that its profit before tax for 2013 rose 9.8% to 28.7m euros (£23.8m). | The tie-up came as Fyffes revealed that its profit before tax for 2013 rose 9.8% to 28.7m euros (£23.8m). |
It said results in its banana division were "broadly satisfactory", although profits in that division were slightly down compared with 2012's strong performance. | It said results in its banana division were "broadly satisfactory", although profits in that division were slightly down compared with 2012's strong performance. |
It said "significant inflation" in the cost of fruit and the strength of the US dollar against sterling had both hit performance. | It said "significant inflation" in the cost of fruit and the strength of the US dollar against sterling had both hit performance. |
More deals expected | |
The global market is currently controlled by four firms - Chiquita, Dole Food Company, Fresh Del Monte and Fyffes - according to the United Nations. | |
"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, analyst at Merrion Stockbrokers. | |
The deal is expected to go through this year, but will be subject to review by competition authorities. | |
However, Mr Holohan said that because the two firms operated mainly in separate North American and European markets, this was unlikely to be a problem. |
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