Few individuals have lost out more on the scuppering of the ChiquitaFyffes merger than David McCann, executive chairman of Fyffes, which was yesterday dumped at the altar by the shareholders of its would-be US bride.
McCann, who would have headed up the new operation, was due payments of up to $13.5 million (€10.5m) in salary and bonuses over the first two years post the merger were it to succeed.
He was paid about €1 million by Fyffes last year in salary and bonuses, before share awards and pension payments.
Quite a difference. Not that the wolves will be scratching at the door of the millionaire scion of one of Ireland’s most blue-blooded corporate families.
Ireland has lost out too, however. ChiquitaFyffes, which would have been the biggest banana company in the world, was to have been headquartered and essentially run from here, although listed in New York.
Having another global industrial leader operating out of Dublin would have done corporate Ireland no harm at all in the prestige stakes. Ryanair, Smurfit Kappa and CRH, all leaders in their respective fields, are proof of that.
The deal essentially failed because Chiquita’s shareholders did not trust their own board, whose reputation came under relentless attack from the Brazilian suitors who wrecked the merger. The shareholders simply did not believe it when they were told the merger would deliver savings of up to $60 million. Chiquita’s board has in recent years regularly failed to live up to its own guidance.
What now for Fyffes? It will go back to what it was before the merger was proposed – the biggest banana importer in Europe, a steady operator with a conservative balance sheet and a penchant for smaller deals.
It was always punching above its weight with the Chiquita merger. Much smaller than the US company, it had initially secured a much larger slice of the enlarged entity than it should really have been entitled to – almost 50 per cent – by dint of its healthy balance sheet. Even when it agreed to scale back its stake to closer to 40 per cent, it still looked a remarkably good deal for it.
Debt-addled Chiquita needed Fyffes more than Fyffes needed it. The Irish company got dumped. But the bride wasn’t all that much to shout about anyway.
