Japan’s Sumitomo Corporation to buy Irish banana firm Fyffes for $800 mln

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Dublin | Published: December 9, 2016 2:58:24 PM

Japanese trading firm Sumitomo Corporation has agreed to buy Irish banana producer Fyffes for 751 million euros ($798 million), a 49 percent premium to Thursday's price, and said it hoped to complete the deal early next year.

The board of the Irish firm, whose proposed merger with Chiquita Brands collapsed in 2014, recommended the deal to shareholders. (Image Source: Website)The board of the Irish firm, whose proposed merger with Chiquita Brands collapsed in 2014, recommended the deal to shareholders. (Image Source: Website)

Japanese trading firm Sumitomo Corporation has agreed to buy Irish banana producer Fyffes for 751 million euros ($798 million), a 49 percent premium to Thursday’s price, and said it hoped to complete the deal early next year.

Sumitomo, which is offering 2.23 euros in cash per share, said it had secured acceptances from 27 percent of shareholders and expected to have completed the deal by the first quarter of 2017, subject to regulatory approval.

Fyffes shares opened on Friday at 2.22 euros.

Sumitomo, which is a leading banana producer in Asia, said the deal would provide it with “enhanced scale and portfolio diversity.” Its operations in the industry range from plantations in the Philippines to retail distribution across the Asian region.

The board of the Irish firm, whose proposed merger with Chiquita Brands collapsed in 2014, recommended the deal to shareholders.

“We believe this transaction represents a compelling proposition for our shareholders and crystallises the substantial value created in recent years through the various strategic developments and the strong operating performance of our Group,” Fyffes Chairman David McCann said in a statement.

The move by Sumitomo is the latest example of Japanese companies snapping up assets in other parts of the world to diversify away from their home market, which is struggling with an ageing population and slow economic growth.

Brewer Asahi is currently bidding for its second European beer deal this year, while Ajinomoto recently agreed to take a stake in African drinks form Promasidor.

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