LONDON (AP/WBTV) - Charlotte-based Chiquita has combined with Dublin-based Fyffes to become the world's top banana company.
Chiquita will not longer have a stand alone headquarters in Charlotte, as several executives will now report to Dublin, Ireland, officials said in a morning conference call about the merger.
However, several executives will remain in the Queen City to oversee operations in North and South America.
"Every economic development incentive grant approved by the City and County contains provisions that require the recipient to repay all or a portion of the grant, should it fail to meet the terms of the grant," Charlotte Mayor Patrick Cannon said in a statement on Monday afternoon. "Based on the most current information, it is not anticipated that this merger will affect the status of the local grants, but City staff will review this further in the coming weeks as more information becomes available."
The stock-for-stock transaction announced Monday creates a global banana and fresh produce company with $4.6 billion in annual revenues.
The new company, ChiquitaFyffes, will have an operating presence in more than 70 countries and a workforce of approximately 32,000 people. It will become the largest company in the global banana market with sales of more than 160 million boxes annually.
"Today is not about losing Chiquita," said Charlotte Chamber President Bob Morgan. "Today is about Chiquita getting stronger and more viable."
He calls the merger good news.
"I think this is a way for them in a very low margin business to create scale that's going to make them healthier and more competitive and that's good for Charlotte," Morgan said
But it also means that Chiquita is violating part of its agreement with state and local officials. In exchange for its incentives, the company promised to keep its headquarters in Charlotte for ten years.
So does that mean Chiquita's deal is done?
"If they don't perform to the incentives as they agreed to the incentives are not available to them," Morgan says. "They are very performance-based and the taxpayers are well protected on that."
There are clawbacks in the agreement, so Chiquita could have to pay taxpayers back for the incentives it has already received. City attorneys are poring over the case.
Ed Lonergan, Chiquita's chief executive officer, says the deal creates a strategic partnership that combines two complementary companies that will work to bring best practices in countries where they operate.
Chiquita Brands International is based in Charlotte and has a big presence in the United States while Fyffes has a major presence in Europe.