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Fyffes Transaction (Notes)
3 Months Ended
Mar. 31, 2014
Fyffes Transaction [Abstract]  
Schedule of Business Acquisitions, by Acquisition [Table Text Block]
Note 3 – Strategic Combination with Fyffes plc
On March 10, 2014, we announced our intention to combine with Fyffes plc ("Fyffes") and entered into a transaction agreement for the proposed combination. Fyffes is a leading international importer and distributor of tropical produce, including bananas, pineapples and melons, with annual sales in excess of €800 million. Fyffes is headquartered in Dublin, Ireland and has operations in Europe, the U.S., Central and South America and has begun operations in Asia. Fyffes markets its produce under a variety of trademarks including the Fyffes® and Sol® brands and employs over 12,000 people worldwide.
In the proposed combination, Fyffes will become a wholly owned subsidiary of a new Irish holding company, ChiquitaFyffes, plc ("ChiquitaFyffes"). Fyffes shareholders will receive 0.1567 of a ChiquitaFyffes ordinary share for each Fyffes share they hold and, upon completion of the combination, will own approximately 49.3% of ChiquitaFyffes ordinary shares, on a fully diluted basis. Chiquita will become an indirect wholly-owned subsidiary of ChiquitaFyffes and Chiquita shareholders will receive one ChiquitaFyffes ordinary share for each Chiquita share that they hold and, upon completion of the combination, will own approximately 50.7% of ChiquitaFyffes ordinary shares, on a fully diluted basis.
The proposed combination is expected to be completed before the end of 2014, but remains subject to shareholder approval by both Chiquita and Fyffes shareholders as well as required regulatory approvals in the U.S., the European Union and other jurisdictions. The proposed combination will be accounted for as a business combination using the acquisition method of accounting under the provisions of Accounting Standards Codification ("ASC") 805, with Chiquita determined to be the accounting acquirer.
The preliminary purchase price calculation based on the outstanding common shares of Fyffes plc, plus stock options expected to vest on or before the closing date, Chiquita's closing stock price of $10.84 on March 7, 2014 (the last trading day prior to the public announcement of the combination) and an exchange rate of $1.39 per euro values the purchase price consideration to Fyffes shareholders at approximately $519 million. The purchase price consideration could change materially and will ultimately be based on the closing date share price of Chiquita stock on the final date of the combination and the number of Fyffes stock options that will have vested by that date.
In connection with the proposed combination, we expect to incur significant legal, advisory and other expenses throughout 2014, of which $6 million was incurred and expensed in the first quarter of 2014. The transaction agreement also provides for equal cost-sharing of fees between Chiquita and Fyffes relating to obtaining regulatory approvals. In the transaction agreement related to the proposed combination, we made customary representations and warranties, and agreed to customary covenants limiting our ability to, among other things: issue shares of capital stock; pay dividends; repurchase, redeem or acquire capital stock; redeem, repurchase, prepay or incur indebtedness; enter into, terminate or amend existing material contracts; enter into employment or severance agreements with certain employees; acquire equity interests or assets of third parties; sell or otherwise dispose of assets; and conduct restructuring or reorganization activities.