Irish fruit firm Fyffes is to be acquired by Japanese giant Sumitomo Corporation in a massive €751.4m cash deal, the company has said.
The Dublin headquartered firm, which is most commonly known for its bananas, will be snapped up by Swordus Ireland Holding Limited, a wholly-owned subsidiary of Sumitomo.
Under the terms of the deal Fyffes shareholders will be entitled to receive €2.23 in cash for each ordinary share. The acquisition represents a premium of around 37pc of Fyffes’ all-time high share price of €1.62, which occurred on April 22 of this year.
Shareholders in the Irish company will also be paid a final dividend for this calendar year of 2c per share, brining the total amount going to shareholders up to €2.25. Fyffes chairman David McCann said the deal is a “compelling proposition”.
“Our employees, customers, suppliers and joint venture partners will benefit from Fyffes being part of an enlarged group with greater scale, reach and resources to broaden and accelerate delivery of Fyffes’ strategic objectives.
“We look forward to working with the Sumitomo team to develop and enhance our Group’s strategy and to build on its long track record of successful growth,” he said this morning.
Sumitomo managing executive officer Hirohiko Imura said his company has long-admired Fyffes for its market-leading position.
“We believe that our offer represents a great reward for Fyffes’ shareholders. We are grateful that the McCann family has provided an irrevocable commitment of support and is entrusting us to continue with them the rich Fyffes heritage.
“Sumitomo will provide Fyffes with experience, support and investment to continue to build on the tremendous Fyffes skills and experience and reach greater potential.”
The Japanese firm said it intends expanding Fyffes into new markets as well as expanding its produce offerings. Fyffes already operates in the pineapple, banana, mushroom, and melons markets.
The deal remains subject to approval from Fyffes shareholders and High Court sanction. However, Sumitomo said it has received “irrevocable undertakings” to vote in favour of the deal from shareholders that own a 27.21pc stake in the company’s issued share capital.
Sumitomo operates across 66 countries and employs more than 65,000 personnel. The company is valued at around $15bn with $8bn of cash on its balance sheet at the end of March.
By Michael Cogley
Source: Irish Independent
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