Sumitomo swallows European banana giant Fyffes

Japanese conglomerate Sumitomo has agreed to buy European banana king Fyffes for 751 million euros (SR2.9 billion), both groups said Friday, in a fresh sign of the fruit’s booming popularity worldwide.
The Dublin-based fruit importer and distributor, best known for its eponymous Fyffes bananas, has accepted Sumitomo’s bid which is worth the equivalent of $804 million, it said in a statement to the Irish Stock Exchange.
Bananas are the world’s best-selling fruit, according to recent data from research consultancy Euromonitor, with sales volumes totalling 78.4 million tons in 2015.
Fyffes is the top importer of bananas to Europe and also specializes in pineapples, melons and mushrooms. It has more than 17,000 employees.
Global trading firm Sumitomo Corporation, which comprises 800 different businesses with more than 65,000 staff, is the top banana player in Asia having been active in the industry since the 1960s.
“We believe this transaction represents a compelling proposition for our shareholders and crystallizes the substantial value created in recent years,” said Fyffes Chairman David McCann.
Sumitomo’s Hirohiko Imura added: “We look forward to working with the Fyffes team to further develop the business over the longer-term and to expanding into new markets to better serve customers.”
Fyffes traces its roots back to 1888 when tea trader Edward Wathen Fyffe began shipping bananas from the Canary Islands into London.
The Dublin-listed group now distributes some 46 million cases of bananas per year in Europe, and it also operates in North, Central and South America. Fyffes added Friday that 27 percent of its shareholders have already approved Sumitomo’s offer, which is expected to be formally ratified at an extraordinary general meeting.
The takeover bid was pitched at 2.23 euros in cash and represented a premium of almost 50 percent the closing price on Dec. 8.
Fyffes is one of the biggest companies in Ireland with annual revenues of 1.2 billion euros and a market capitalistion of 736 million euros. The company was originally British-owned before it was acquired in 1986 by Fruit Importers of Ireland, founded and operated by the McCann family.
The McCann family, which remain the biggest shareholders with some 12 percent equity, have given an irrevocable commitment of support to Sumitomo’s takeover bid.
Friday’s news comes two years after US rival Chiquita failed to buy Fyffes in a takeover that would have created the world’s biggest banana producer.
Chiquita was subsequently bought by Brazilian juice exporter Cutrale Group and investment bank Safra.

Source: Arab News