Banana firms Chiquita Brands International Inc. CQB +1.86% and Fyffes FFY.DB +2.34% PLC on Friday agreed to a new merger deal that will give Chiquita a greater share of the combined company and potentially thwart takeover interest from a rival bidder.
Under the new deal, Chiquita shareholders will own 59.6% of the combined company, an increase from 50.7%, and Fyffes shareholders will own 40.4%.
Chiquita agreed in March to buy Fyffes for more than $500 million in an all-stock deal to create the world’s largest banana company. Based on their closing prices Thursday, the combined group—to be called ChiquitaFyffes—would be worth about $1.06 billion.
But the merger was delayed last month when Brazilian firms Cutrale Group and Safra Group offered around $625 million to buy Chiquita.
“The world has changed since March,” said David McCann, Fyffes’s executive chairman, referring to the counterbid from Cutrale-Safra. “We wanted to understand what was needed to get the deal done.”
The Cutrale-Safra partnership said Friday that it would continue its due diligence and expects to make a new offer as “expeditiously as possible.”
Mr. McCann said the merger with Chiquita, a so-called tax inversion that would allow the combined company to reincorporate in Ireland, had never been motivated by tax incentives.
“This was never a tax-driven transaction in the way some others were,” he said, adding that the revised terms of the merger weren’t influenced by new U.S. inversion rules announced Monday.
The new merger agreement fires the latest salvo in an increasingly competitive battle for Chiquita, the world’s No. 2 banana company by export volume after Dole Food Co.
Chiquita last week delayed its shareholder vote on the deal, opening the door for Cutrale-Safra and forcing Fyffes to sweeten its part of the merger.
That came after an influential shareholder adviser earlier this month pushed Chiquita to negotiate with Cutrale-Safra and the Charlotte, N.C., banana grower invited the Brazilian companies to complete due diligence and make their best offer by Oct. 3.
Under the original deal, Fyffes shareholders would have received 0.1567 ChiquitaFyffes shares for each Fyffes share, and Chiquita shareholders would have gotten one ChiquitaFyffes share for each Chiquita share held. The new offer gives Fyffes shareholders 0.1113 ChiquitaFyffes shares for each Fyffes share they hold.
Fyffes shares were up 3.7% to €1.11 ($1.42) in midday Dublin trading.
By Peter Evans and Ian Walker
