CHANGES to the proposed merger between Chiquita and the Irish fruit importer Fyffes will give Chiquita shareholders a larger stake in what would become the world’s largest banana supplier.
The companies said Friday that shareholders of Chiquita Brands International Inc will own nearly a 60 per cent stake in the combined company under the revised all-stock deal, up from about 51 per cent. Fyffes PLC shareholders will see their stake drop to about 40 per cent, from more than 49 per cent.
The boards of both companies have approved the revised deal, but shareholders still have to vote on it.
Chiquita and Fyffes announced their agreement last March. The new company will be incorporated in Dublin, where Fyffes is headquartered. Chiquita is based in Charlotte, North Carolina.
Chiquita and Fyffes said last week that they may make some concessions in their agreement to ensure that it is approved by European regulators. Fyffes spokesman Seamus Keenan said the deal revision announced Friday had nothing to do with that.
He also said the revision was not motivated by new regulations announced this week by the US Treasury Department that are designed to make overseas maneuvers like the Chiquita-Fyffes deal less lucrative.
Under a so-called “inversion”, a US business will reincorporate in another country after combining with a foreign company. It is then possible to lower the US tax rate of the company.
The practice has become a hot-button issue. Critics, including high-ranking lawmakers, have said that inversions create a heavier tax burden for others. – AP