World's largest banana firm picks Republic as tax base
The Republic's low corporation tax rate has tempted the world's biggest banana company to base itself in Dublin rather than the US.
ChiquitaFyffes – the new name for the company formed from the merger of Chiquita and Fyffes – said it will be listed on the New York Stock Exchange but based at Fyffes' Irish headquarters where it can take advantage of corporation tax charged at just 12.5%.
Was the newly formed company to be based in the US it would be subject to a big business tax rate of 40%, a differential which is said to be one of the reasons why companies such as Apple and Google have large bases in the Republic.
The merger of the two companies is said to have been precipitated by growing pressure on margins in the tropical fruit business from retailers.
Fyffes, a stalwart of the trade both in Ireland and globally, traces its roots back to 1888 when Edward Wathen Fyffe first shipped bananas from the Canary Island and sold them across London.
It claims to be the world's oldest fruit brand and is recognised by its blue labels which it started using in 1929. The new company will dominate the banana trade and sell over 180 million boxes of bananas a year, dwarfing nearest rivals Del Monte and Dole. It will operate in 70 countries and have a workforce of 32,000 people.
Current Fyffes shareholders will own 49.3% of the new business and Chiquita shareholders 50.7%.
Fyffes executive chairman David McCann said the deal will offer new opportunities for the business.
"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 new company said it expects the merger to save around $40m (£24m) in "tax overhead and operational synergies" by the end of 2016.
Ed Lonergan, Chiquita's chief executive officer said the new company will retain the historical brands.
"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."