April 2014: Fyffes

Company of the Month | Mon 28 Apr | Author – Business & Finance
Ian Hyland, CEO Business & Fianance; John Farrelly, general manager, SAS Ireland; David McCann, CEO, ChiquitaFyffes

Fyffes, the oldest branded fruit worldwide, recently announced that it is to merge with US food group Chiquita, to create the world’s largest banana company.

The merged entity will be called ChiquitaFyffes and will be listed on the New York Stock Exchange (NYSE) but domiciled in Ireland. It will have combined annual revenues of approximately $4.6bn (€3.3bn). The new company will also have an operating presence in more than 70 countries and a workforce of approximately 32,000 people around the world.

A global brand

Fyffes has been a leading international importer and distributor of tropical produce for nearly 100 years. With annual turnover in excess of $1.5bn, it is headquartered in Dublin, and has operations in Europe, the US, Central and South America and just recently has begun operations in Asia. Fyffes activities include the production, procurement, shipping, ripening, distribution and marketing of bananas, pineapples and melons. It markets its produce under a variety of trademarks including the Fyffes and Sol brands and employs over 12,000 people worldwide.

While Fyffes are primarily involved in the importation and marketing of fruit, under the stewardship of its current chairman, David McCann, the Group have diversified significantly to reduce their reliance on bananas. Fyffes’ activities now also include property within its associated company Balmoral International Land plc. Other global subsidiaries of Fyffes include Banana Importers of Ireland Limited, German fruit distributor Van Wylick, Fyffes Bananas North America Limited (US) and Anaco International BV (The Netherlands).

Chiquita merger

The merger of Fyffes and Chiquita, which is due to be complete before the end of 2014, is one of major significance in the food and drink industry in Ireland, as the new company will be domiciled here. The merger announcement came on the same day – March 10th – that the company announced its preliminary financial results for 2013. With over a 6% increase in revenue to €1.1bn, the company also reported a significant increase in its share price on the Irish Stock Exchange, with shares climbing more than 42% on March 10th.

In relation to shares, on completion of the transaction, Chiquita shareholders will own approximately 50.7% of ChiquitaFyffes, and Fyffes shareholders will own approximately 49.3% of ChiquitaFyffes, on a fully diluted basis. Ed Lonergan – current CEO of Chiquita – will serve as chairman and David McCann will become chief executive officer of the combined company, ChiquitaFyffes plc.

“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 that is well positioned to succeed in our highly competitive marketplace and which will create significant value for our shareholders,” said David McCann, Fyffes executive chairman. “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.”

About the CEO David McCann joined the Group in 1986, having previously practiced as a partner in a leading Dublin law firm. He became managing director in 1989 with responsibility for the Group’s operations. He was appointed chief executive in 1995 and became chairman in December 2006. Once the merger with Chiquita is complete, McCann will be CEO of the new company.

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Business & Finance, Company of the Month

Business & Finance, in association with SAS Ireland, recognises excellence in business through the ‘Company of the Month’ award. The Company of the Month award recognises the company which best demonstrates outstanding business leadership, sustainable growth, innovative strategy, strong financial returns and employee development.