Cutrale Group, one of the world’s biggest orange juice suppliers, and the investment firm of Safra Group have offered a $625 million buyout to Chiquita Brands International Inc. in order to stop the company from merging with Ireland’s Fyffes. The offer would equal $13 in cash per share – a 29% premium to Friday’s closing price, and upon word of the offer, Chiquita’s shares increased 30% while Fyffes declined by 14% in Dublin. Earlier this year Chiquita and Fyffes planned a structured merger known as an inversion deal which would create the world’s biggest banana company and move operations to Ireland where the company could take advantage of lower corporate tax rates. Recently inversion-structured mergers have come under scrutiny by Washington and the Obama administration has stated that it could act without Congress to limit the deal’s advantages. Cutrale Group is a giant in the global orange juice sector controlling one third of Brazil’s $5 billion orange juice industry, and owns plant in both Brazil and Florida. Safra Group is Brazil’s eighth largest bank in terms of assets with $200 billion under management. The buyout could offer diversity to Cutale which has seen global orange juice sales plummet, and could help it compete with Dole Foods Co. and Del Monte Fresh Produce Inc. If given the opportunity to conduct due diligence, Cutrale and Safra state that they can close a deal by the end of the year.
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