FDBusiness.com

Sumitomo Corporation, the Japanese global trading company, has made a €751.4 million recommended cash offer for Fyffes, a leading international grower, importer and distributor of fresh produce. With annual turnover in excess of €1.2 billion, Fyffes is headquartered in Dublin, Ireland with operations in Europe, the US, Canada, Central America and South America and Asia. Fyffes activities include the production, procurement, shipping, ripening, distribution and marketing of bananas, pineapples, melons and mushrooms. It markets its produce under a variety of very well-known brands including Fyffes®, Sol®, Turbana®, Hoya®, Highline® and All Seasons® and employs in excess of 17,000 people worldwide.

The Sumitomo offer of €2.23 per share represents a premium of approximately 49% to Fyffes’ closing share price of €1.50 on 8 December 2016.

“Sumitomo Corporation has long admired Fyffes for its outstanding track record and market leading position, and we are delighted that the Fyffes directors have unanimously agreed to recommend our offer to shareholders,” says Hirohiko Imura, representative director, managing executive officer of Sumitomo. “We have significant experience in the produce sector and look forward to working with Fyffes’ executive directors, senior management and employees, customers and other stakeholders to strengthen Fyffes’ already impressive market position through continued investment. We look forward to working with the Fyffes team to further develop the business over the longer-term and to expanding into new markets to better serve customers.”

With 109 locations in 66 countries, Sumitomo Corporation consists of over 800 companies and has a market capitalisation of about US$15 billion with US$8 billion in cash on balance sheet as at its year end on 31 March 2016. Sumitomo has been active in the banana industry since the 1960s and is the market leader in Asia with a fully integrated business model with interests ranging from plantation operations in the Philippines to retail distribution across the Asian region. Currently, the Sumitomo Group imports approximately 30% of the bananas into the Japanese market.

The Sumitomo board believes that Fyffes’ strong position as an international grower, importer and distributor of high quality produce in complementary markets makes it a natural fit with Sumitomo’s organisation.

David McCann, chairman of Fyffes, comments: “We believe this transaction represents a compelling proposition for our shareholders and crystallises the substantial value created in recent years through the various strategic developments and the strong operating performance of our Group. Our employees, customers, suppliers and joint venture partners will benefit from Fyffes being part of an enlarged group with greater scale, reach and resources to broaden and accelerate delivery of Fyffes’ strategic objectives. We look forward to working with the Sumitomo team to develop and enhance our group’s strategy and to build on its long track record of successful growth.”