Then, more on the background and “reasons for” the merger. Funny, none of the bullet points include reference to a better bargaining position with retailers....
Chiquita Background to and Reasons for the Merger
The Combination will create a leading global produce company with approximately $4.65 billion in combined annual revenues and a presence in key markets around the world. The Combination is consistent with Chiquita’s strategic goal of focusing on core products and delivering greater operating efficiency. The combined company will more efficiently serve customers and better meet their demands. It will also, in the Chiquita Board’s judgment, have a stronger foundation and be better able to deliver enhanced shareholder value, by:
- Having an enhanced scale, scope and portfolio diversity;
- Delivering a wider scope of produce more efficiently to key markets around the world;
- Optimizing the combined company’s capital structure and cash flow for debt repayment;
- Combining the best of both companies, including their respective management talent; and
- Benefitting from operational efficiencies and cost savings, generating at least $40 million in annualized recurring before tax overhead and operational synergies by the end of 2016.6 In addition to reducing administrative costs and other overhead expenses, these recurring annual synergies are anticipated to comprise of efficiencies in the areas of fruit utilization, shipping, port operations, packaging and procurement.
- In addition to the benefits for customers, the Combination is expected to be accretive to shareholders of both companies on a net income basis no later than the first full calendar year after consummation, having regard to the anticipated synergies (please see paragraph 9 (Merger Benefit Statement) of this announcement).
Then, from Fyfees:
Fyffes Background to and Reasons for Recommending the Scheme Transaction
The Fyffes Board believes the Combination, if successfully completed, will create a major global banana and other fresh produce company. It is the opinion of the Fyffes Board that Fyffes and Chiquita are a natural fit, given their complementary activities, respective geographic reach and their industry understanding. The combined Fyffes and Chiquita knowledge of farming, procurement, shipping, ripening and distribution ensures that ChiquitaFyffes will be well placed to build an organisation that can operate smoothly and efficiently, encourage growth in its industry, create synergies, satisfy customers’ expectations and generate returns for shareholders. Additionally, the combined company will retain its leading position in the U.S. retail and packaged salads market.