Chiquita struggles with costs, prepares for merger - The Packer

Chiquita struggles with costs, prepares for merger

08/07/2014 02:35:00 PM
Coral Beach

Regarding the company’s plan to merge with Fyffes by year’s end, which will result in an annual tax savings of $40 million for the new entity, Lonergan said Chiquita shouldn’t be lumped in with other U.S. companies that are changing corporate citizenship.

“Tax didn’t motivate our transaction and it wasn’t a driver of our transaction,” said Lonergan. “Not a single dollar of those synergies comes from tax.”

Chiquita paid $4 million in U.S. taxes on its profits during the second quarter. It sells 39% of its bananas in Europe and the Middle East, which helps keep its U.S. taxes down.

Lonergan said that the company plans to maintain offices and employees in the U.S., including about 320 corporate jobs in Charlotte. He said after the merger the combined ChiquitaFyffes will have about 5,000 employees in the U.S. and a worldwide total of between 33,000 and 34,000.

The companies have scheduled Sept. 17 stockholder votes on the $1 billion merger. Lonergan said even though some in Congress are pushing for changes to tax laws for companies moving overseas, nothing has been proposed that would dissuade the companies’ merger plans.

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