The merged company will be called ChiquitaFyffes, with $4.6 billion in annual revenue sales. That would push the newly formed company past Dole Food Company (DOLE) in banana sales.
Shareholders of Chiquita would own more than 50% of the stock, the companies said in a joint statement.
“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,” Chiquita Chief Executive Officer Ed Lonergan said.
The companies said the merger would bring annual cost savings of at least $40 million by 2016. As well as trading in bananas, ChiquitaFyffes will have strong positions in melons, pineapples and packaged salads, the companies said.
The new company is positioned to exploit growing global demand for bananas, supported by improvements to shipping which allow the yellow fruit to stay fresh for longer. Exports of bananas increased by 7.3% in 2012 to an all-time high of 16.5 million tons, according to the United Nations.
The companies plan to complete the deal this year.