Going Bananas

Chiquita and Fyffes announced today that the companies plan to merge. Chiquita, which sells bananas primarily in the U.S., and Fyffes, which sells primarily in Europe, would control about 14 percent of world banana sales. The combined company will have annual revenues of $5 billion. While the companies feel that the ChiquitaFyffes will be the top banana, shareholders went bananas too. Chiquita shares jumped up about 10 percent, while Fyffes shares shot up about 40 percent. Although Chiquita has sales of $3 billion compared to Fyffes' €1.1 billion ($1.53 billion), Fyffes shareholders will own 49.3 percent of the combined company. The merger is expected to save ChiquitaFyffes about $40 million per year in pretax operating expenses.