Mar.10 - Shares in Fyffes have jumped by a third after news that U.S. fruit distributor Chiquita Brands International Inc is to buy its Ireland-based rival for $526 million. But as Ciara Sutton reports there are concerns about what will become the world's biggest banana supplier.
Together they'll be worth $4.6 billion and will be the world's biggest banana supplier. U.S. fruit distributor Chiquita is buying Irish rival Fyffes for $526million. The fresh produce company is expected to generate pre-tax savings of at least 40 million dollars within three years. But there are potential slip-ups ahead - the deal could raise anti-trust issues. The United Nations says more than 80 percent of the global banana market is controlled by four multinationals. Fresh Del Monte and Dole Food -the other two. Robert Cole is from Reuters Breakingviews. (SOUNDBITE) (English) REUTERS BREAKINGVIEWS EDITOR, ROBERT COLE, SAYING: "Bananas, yes I mean we smile about it, but it's been a really hot business/political topic for years and years and years. There are small countries in the West Indies and other places, which depend on bananas. So having a global very powerful company really might not suit some of the competition authorities. Certainly when I go into the supermarket it's either Fyffes, or Chiquita. So where I am I'm going to be worried about the price of bananas. And maybe some other people will be too." Those concerns weren't echoed in the market. Fyffes shares surged 29 percent after the announcement. Chiquita shareholders will own just over half of the combined company. And being listed in New York, but based in Ireland, will see the firm get significant tax savings.