FFY.L Share News (FFY)

Fruit supplier Fyffes said it had agreed a merger with Chiquita Brands International as it served up sweeter annual profits and revenue, but said it faced rising costs.Fyffes said the deal would result in its shareholders owning about 49.3% of the new company, ChiquitaFyffes, and Chiquita's investors holding 50.7%.It said the deal would create a global banana and fresh produce company with about $4.6bn in annual revenues and annual savings of $40m. The pair plan to complete the deal before the end of 2014 and the combined company will be listed in New York and domiciled in Ireland.Dublin-based Chiquita, which produces bananas, packaged salads and healthy snacks, trades in 70 countries.Ed Lonergan, Chiquita's Chief Executive, said: "This is a milestone transaction for Chiquita and Fyffes that brings together the best of both companies."Fyffes' Executive Chairman David McCann said: "This deal will be transformative and offer exciting opportunities for the new business."Fyffes boosted pre-tax earnings before interest in the year to December 31st by 10.6% to €31.3m on a 6.3% rise in revenue to €1.08bn.The group said growing markets for its bananas and melons and price inflation in bananas and pineapples had driven the increase in turnover.Banana profits were down slightly on a strong result a year ago as the industry faced more significant rises in the cost of fruit in 2013, continuing the trend of previous years.There was also an adverse year-on-year movement in exchange rates due to the strength of the US dollar, particularly relative to sterling.Fyffes said it had managed to partly make up for the issues with lower transport costs and more banana business with new as well as existing customers.The group, which farms pineapples in Costa Rica, said farming costs drove up production spending and exchange rates had a negative effect, but markets were generally more positive.Fyffes' US melon business performed satisfactorily in 2013. Good weather in the production regions during the key import season, in the first half of the year, resulted in improved yields and lower production costs and drove up import volumes, but average selling prices were down on very strong 2012 prices due mainly to higher imports.PW