Chiquita Brands And Fyffes To Merge

(RTTNews) - Chiquita Brands International Inc. (CQB) and Fyffes plc (FFY.L) announced that they entered into definitive agreement under which Chiquita will combine with Fyffes, in a stock-for-stock transaction that is expected to result in Chiquita shareholders owning approximately 50.7% of the combined company, and Fyffes shareholders owning approximately 49.3% of combined, on a fully diluted basis.

The Boards of Directors of both companies have unanimously approved the agreement. The agreement creates a global banana and other fresh produce company with approximately $4.6 billion in annual revenues. Chiquita and Fyffes plan to complete the transaction before the end of 2014.

The combined company will be named as ChiquitaFyffes plc, which will be Listed on the New York Stock Exchange and Domiciled in Ireland.

Chiquita is an international marketer and distributor of nutritious and high-quality fresh food products, including bananas, packaged salads and healthy snacks. Chiquita has a global presence with operations in 70 countries, a sizable presence in the U.S. market and widely recognized brands including Chiquita Bananas and Fresh Express.

Fyffes is an international marketer and distributor of top quality, healthy tropical produce, marketed under a variety of well-known brands including Fyffes and Sol. It is headquartered in Dublin, Ireland, with operations in Europe, the U.S., Central America, South America and Asia.

ChiquitaFyffes will have an operating presence in more than 70 countries and a workforce of approximately 32,000 people around the world.

Chiquita and Fyffes anticipate that the transaction will potentially provide annualized recurring before tax overhead and operational synergies of at least $40 million by the end of 2016. In addition to the benefits for customers, taking into account the anticipated synergies, the transaction is expected to be accretive to shareholders of both companies on a net income basis no later than the first full calendar year following the close of the transaction.

Under the terms of the Transaction Agreement, Fyffes 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 also become shareholders of ChiquitaFyffes and receive one ChiquitaFyffes share for each Chiquita share that they hold upon closing of the merger contemplated as part of the overall transaction.

The transaction values the entire issued and to be issued share capital of Fyffes at approximately $526 million (379 million euros) and each Fyffes share at 1.22 euros based on Chiquita's closing share price on March 7, 2014 and a Euro/U.S. dollar exchange rate of 1.39, which represents a premium of approximately 36% compared to 0.90 euros , Fyffes volume-weighted average trading price for the 30 trading day period ending March 7, 2014 (the last trading day prior to this announcement), and a 38% premium to the Fyffes closing share price on March 7, 2014 of 0.89 euros. On this basis, the transaction will result in a combined equity value of approximately $1.07 billion or 770 million euros.

Ed Lonergan will serve as Chairman and David McCann will become Chief Executive Officer of the combined company, ChiquitaFyffes plc.

The scheme and the merger are subject to approval by Fyffes and Chiquita shareholders, respectively, and by the High Court of Ireland.

Fyffes shareholders holding Fyffes shares representing 25.6% of Fyffes outstanding share capital have given commitments that they will vote in favour of the combination.

In a separate press release, Fyffes reported that profit from continuing operations attributable to equity shareholders for the year ended 31 December 2013 grew to 25.62 million euros from last year's 23.78 million euros. Earnings per share were 8.51 cents, up from 8.00 cents last year.

Adjusted profit before tax for 2013 amounted to 31.1 million euros, 6.3% up on the restated result for the previous year, similar to the increase in EBITA. Profit before tax, excluding these adjustments, amounted to 28.7 million euros compared to 26.1 million euros (restated) in 2012, an increase of 9.8%, reflecting a reduction in amortisation charges.

The Group's adjusted earnings per share in 2013 amounted to 8.82 cent, up 3.2% on the 8.55 cent restated result in the previous year This increase reflects the 6.3% increase in adjusted profit before tax less the impact of the higher tax and non-controlling interests charges and a higher number of shares due to the diluting effect of share options as a result of the increase in the Group's share price.

Total revenue, including the Group's share of its joint ventures, increased by +6.3% in 2013, to 1.1 billion euros. Group revenue, excluding Fyffes' share of its joint ventures, amounted to 836 million euros in the year, an increase of 6.6%. The increase in turnover in the year has been driven by further organic growth in the Group's banana and melon categories, combined with price inflation in the banana and pineapple categories, reflecting higher input costs.

The Board is proposing to pay a final dividend for 2013 of 1.49 cent per share, up 4.9% on the previous year. Subject to shareholder approval at the forthcoming AGM, this dividend, which will be subject to Irish withholding tax rules, will be paid on 16 May 2014 to shareholders on the register on 11 April 2014. Total dividends in respect of 2013 will amount to 2.17 cent, 4.8% up on the previous year and equivalent to a payout ratio of 25% based on adjusted earnings per share.