There May Be Several Reasons For Chiquita Merger

Quartz:

For one thing, both melons and pineapples are proving promising for Fyffes. The company’s melon business focuses on the US, where sales have more than doubled since 2008, and it became the top melon-seller in 2011. As for pineapples, while its sales trail those of Fresh Del Monte and Dole in both Europe and the US, Fyffes’ share has been steadily increasing. Neither division would be easily sold off. Fyffes has invested heavily in expanding cultivation of both types of fruit in Latin America; its now grows all of its melons and 56% of its pineapples there.
But another reason might be the rising risk that banana diseases pose to the industry. We recently discussed how an invincible fungus called Panama disease will inevitably threaten banana plantations in Latin America, where the vast majority of export bananas are grown. A more immediate menace is Black Sigatoka, a disease that typically causes losses of 50%-80% of any crop it strikes and is already a severe problem in a slew of Latin American countries. That disease and others force growers to use more pesticides, causing a sharp spike in costs. The growing torrents of chemicals that farmers have to pour on their banana crops is also upping concerns about environmental destruction and harm to workers.
One other thing to note is that Chiquita is not in great financial shape; as of Aug. 2013, its $602 million in total debt was the second-highest relative to earnings among 32 similar packaged-food and meat companies in the US, reports Bloomberg. Which is why it’s interesting that, despite the fact that Chiquita is much bigger than Fyffes, the new company will be based in Ireland, Fyffes’ home country, rather than Chiquita’s home, the US. As Quartz’s Tim Fernholz recently noted, Ireland has an incredibly low corporate tax rate. And for Chiquita, a company struggling to up its cash flow, that certainly can’t hurt.

I thought this was interesting because of the threat from Panama disease and because of the potential relocation of company headquarters to Ireland.  Eaton was headquartered in Cleveland, and when they merged with Cooper Industries, Cooper insisted that the merged company be based out of Ireland because of the corporate tax rate.  I don't think many jobs end up in Ireland, but the company claims to be located there.  So goes the life of a tax haven.