11 Mar 2014

Merger creates world's biggest banana firm

2:11 pm on 11 March 2014

Two giant rivals in the banana business - Fyffes of Ireland and the American firm Chiquita - are to merge to create the world's largest banana company.

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Photo: AFP

The new firm, named ChiquitaFyffes, is expected to sell about 160 million boxes of bananas annually, more than any rival, the BBC reports.

Chiquita chief executive Ed Lonergan says the deal brings together the best of both companies, and will help to save costs. When it's listed in New York, shareholders will receive shares in each firm, with Fyffes shareholders owning about 49.3 percent of the combined company.

The global market is currently controlled by four firms - Chiquita, Dole, 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," says Merrion Stockbrokers analyst David Holohan.

"Now a firm number one has been created, there will be some impetus for further consolidation in the sector."

The deal is expected to go through this year, but is subject to review by competition authorities.

However, Mr Holohan says that because the two firms operate mainly in separate North American and European markets, that's unlikely to be a problem.