Chiquita and Fyffes to Merge, Creating $4.6 Billion Leading Global Produce Company

10 Mar 2014 --- Chiquita Brands International, Inc. and Fyffes plc have announced that the Boards of Directors of both companies have unanimously approved a definitive agreement under which Chiquita will combine with Fyffes, in a stock-for-stock transaction that is expected to result in Chiquita shareholders owning approximately 50.7% of ChiquitaFyffes, and Fyffes shareholders owning approximately 49.3% of ChiquitaFyffes, on a fully diluted basis.

The agreement creates a global banana and other fresh produce company with approximately $4.6 billion in annual revenues. Chiquita and Fyffes plan to complete the transaction before the end of 2014.

Chiquita is a leading international marketer and distributor of nutritious and high-quality fresh food products, including bananas, packaged salads and healthy snacks. Chiquita has a global presence with operations in 70 countries, a sizable presence in the U.S. market and widely recognized brands including Chiquita Bananas and Fresh Express. Fyffes is a leading international marketer and distributor of top quality, healthy tropical produce, marketed under a variety of well-known brands including Fyffes and Sol. It is headquartered in Dublin, Ireland, with operations in Europe, the U.S., Central America, South America and Asia. ChiquitaFyffes will be able to access worldwide market opportunities and capitalize on both the growing fresh food business and health and wellness trends by more effectively utilizing its geographical footprint and expanded distribution channels. The transaction unites two well-respected companies that share a strong brand history, and a commitment to advancing sustainability and increasing access to healthy foods, as well as leading food safety standards. ChiquitaFyffes will have an operating presence in more than 70 countries and a workforce of approximately 32,000 people around the world.

"This is a milestone transaction for Chiquita and Fyffes that brings together the best of both companies which, we believe, will create significant value for our shareholders and offer immediate benefits for customers and consumers worldwide," said Ed Lonergan, Chiquita's Chief Executive Officer. "This is a natural strategic partnership that combines two complementary companies of long history and great reputations that have built upon an unwavering commitment to exceed our customers' expectations. We will maintain our brands, all of which are valued by both customers and consumers. The combined company will also be able to provide customers with a more diverse product mix and choice. We know Fyffes well and our shared heritage will help to ensure a smooth integration as we work to bring best practices across geographies and business units to achieve substantial operating efficiencies."

"This deal will be transformative and offer exciting opportunities for the new business. We are looking forward to working with the Chiquita team to build a combined company which is well positioned to succeed in our highly competitive marketplace and which will create significant value for our shareholders," said David McCann, Fyffes Executive Chairman. "Our outstanding employees will benefit from working for a larger, more diverse business which offers opportunities for growth. We believe we will be able to use our joint expertise, complementary assets and geographic coverage to develop a business that can run smoothly and efficiently to better partner with our customers and suppliers."

The combination of Chiquita and Fyffes is consistent with the strategic goals of both businesses, including increasing shareholder value by:

Combining complementary businesses that provide substantial operational efficiencies and cost savings: Chiquita and Fyffes anticipate that the transaction will potentially provide annualized recurring before tax overhead and operational synergies of at least $40 million by the end of 2016. These recurring annual synergies are anticipated to be comprised of efficiencies in the areas of logistics and procurement, among others. In addition to the benefits for customers, taking into account the anticipated synergies, the transaction is expected to be accretive to shareholders of both companies on a net income basis no later than the first full calendar year following the close of the transaction.2

Uniting two leading companies in the produce industry enhances scale, scope and portfolio diversity: Upon completion of the transaction, the combined company will become the leading global banana and other fresh produce company with greater scale and efficiency. As part of a larger, more diversified organisation, on the basis of current volumes, ChiquitaFyffes will become the largest global entity in the banana category with sales of more than 160 million boxes annually. The company will maintain its significant presence in the packaged salads and healthy snacks category. The company will also have stronger positions in the melon and pineapple market segments as the number one importer in the U.S. and number three distributor globally, respectively.

Leveraging greater global scale to better serve customers and reach new markets: The combined company will be able to broaden its geographic footprint and distribution channels to access new market opportunities. It will be well-positioned to expand its global supply chain to improve product availability; build on each company's well-established presence in developed economies and further the progress both companies have made in expanding into high growth emerging markets worldwide.

Generating significant cash flow and a more efficient capital structure: With the full benefit of the anticipated synergies, the combined company would have had an aggregate EBITDA in 2013 of approximately $214 million on a pro forma basis, implying pro forma combined synergy adjusted Net Debt to EBITDA of 2.7 times.3 Moving forward, the combined company will also have the potential for further reductions in leverage.

Expanding sourcing ability in key production areas: With more than 24,000 hectares of owned or leased operations in Central America, the combined company is expected to be able to more efficiently manage its sourcing portfolio.

Commitment to shared purpose and sustainability: ChiquitaFyffes will continue its environmental and social responsibility commitments, including adding additional organic, Fairtrade, GlobalGAP and Rainforest Alliance certified capacity.

Under the terms of the Transaction Agreement, Fyffes shareholders will receive 0.1567 ChiquitaFyffes shares for each Fyffes share they hold upon completion of the scheme contemplated as part of the overall transaction. Chiquita shareholders will also become shareholders of ChiquitaFyffes and receive one ChiquitaFyffes share for each Chiquita share that they hold upon closing of the merger contemplated as part of the overall transaction.

The transaction values the entire issued and to be issued share capital of Fyffes at approximately $526 million (€379 million) and each Fyffes share at €1.22 based on Chiquita's closing share price on March 7, 2014 and a Euro/U.S. dollar exchange rate of 1.39, which represents a premium of approximately 36% compared to €0.90, Fyffes volume-weighted average trading price for the 30 trading day period ending March 7, 2014 (the last trading day prior to this announcement), and a 38% premium to the Fyffes closing share price on March 7, 2014 of €0.89. On this basis, the transaction will result in a combined equity value of approximately $1.07 billion (€770 million). The actual values received will depend on the trading price of ChiquitaFyffes Shares following consummation of the transaction.

On completion of the transaction, Chiquita shareholders will own approximately 50.7% of ChiquitaFyffes, and Fyffes shareholders will own approximately 49.3% of ChiquitaFyffes, on a fully diluted basis. The scheme transaction is expected to be tax-free, for Irish tax purposes, to Fyffes shareholders. The merger is expected to be taxable, for U.S. federal income tax purposes, to Chiquita shareholders.

Ed Lonergan will serve as Chairman and David McCann will become Chief Executive Officer of the combined company, ChiquitaFyffes plc, which will be a publicly listed company, traded on the New York Stock Exchange (NYSE). The senior leadership team will comprise of: Tom Murphy, Chief Financial Officer, Coen Bos, Chief Operating Officer – Fresh Fruit, Brian Kocher, Chief Operating Officer – Salads & Healthy Snacks, Kevin Holland, Chief Administrative Officer, James E. Thompson, Chief Legal Officer, and Manuel Rodriguez, Corporate Responsibility Officer. The senior executives will be located in corporate offices in Charlotte, North Carolina and Dublin, Ireland. The combined company's Board of Directors will reflect an equal combination of directors from both companies and one mutually agreed upon director.

The scheme and the merger are subject to approval by Fyffes and Chiquita shareholders, respectively, and by the High Court of Ireland. The transaction is also subject to the satisfaction of customary closing conditions and regulatory approvals, including expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as well as merger clearances in Europe and certain other jurisdictions.

Fyffes shareholders holding Fyffes shares representing 25.6% of Fyffes outstanding share capital have given commitments that they will vote in favour of the combination.

Goldman Sachs is acting as lead financial adviser to Chiquita. Wells Fargo Securities, LLC is acting as financial adviser to the Chiquita Board of Directors. Lazard is acting as lead financial adviser to Fyffes. Skadden, Arps, Slate, Meagher & Flom LLP, McCann FitzGerald and Taft Stettinius & Hollister LLP are acting as legal counsel to Chiquita and Simpson Thacher & Bartlett LLP and Arthur Cox are acting as legal counsel to Fyffes. King & Wood Mallesons S J Berwin is acting as antitrust adviser to Fyffes and Kirkland & Ellis LLP and Freshfields Bruckhaus Deringer LLP are acting as antitrust adviser to Chiquita. Davy and Davy Corporate Finance are acting as corporate broker to Fyffes.