Cutrale-Safra wins battle for Chiquita in $1.3 billion deal

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By Guillermo Parra-Bernal

SAO PAULO, Oct 27 (Reuters) - Brazilian juice maker Grupo Cutrale and investment firm Safra Group agreed on Monday to acquire U.S.-based banana producer Chiquita Brands International (NYSE: CQB - news) Inc, in a deal valued at $1.3 billion.

Cutrale-Safra won an almost three month-long battle for control of the Charlotte, North Carolina-based company, which rebuffed their three prior takeover attempts and sought to merge with rival Fyffes Plc.

Chiquita will become a wholly owned unit of Cutrale-Safra and remain incorporated in New Jersey once the deal is finalized, according to a statement.

"To ensure Chiquita has the premier and most sustainable platform in its sector, Chiquita will be able to access Cutrale-Safra's substantial experience in all aspects of the fruit and juice value chain and extensive financial expertise," the statement added.

The acquisition is a victory for Brazilian-Lebanese financier Joseph Safra and orange juice baron Jose Luis Cutrale, who joined forces to add Chiquita to their orange, apple, peach, lemon and soybean business.

Shares (Berlin: DI6.BE - news) of Chiquita gained over 40 percent since Aug. 11, when Cutrale-Safra made their takeover intentions public.

The stock closed at $14.16 on Friday.

Shares of Chiquita, whose Chairwoman Kerrii Anderson fiercely defended the Fyffes tie-up, shed two-thirds of their value over the past decade in the face of geopolitical instability in Latin America, price volatility and uneven demand for fresh produce around the world.

Chiquita, Fyffes, Fresh Del Monte Produce Inc (NYSE: FDP - news) and Dole Food Co control the $7 billion banana market.

Under terms of the deal, shareholders of Chiquita will be paid $14.50 for each of their shares in cash, valuing the company at about $682 million. Cutrale-Safra will assume Chiquita's debt, with Safra-controlled bank J. Safra Sarasin AG extending a buyback of the banana producer's senior bonds due in 2021.

The deal comes as Safra, the world's richest banker, continues to diversify his $16 billion fortune out of banking, finance and real estate. Faced with declining orange juice consumption globally, Cutrale and his family business are expanding into new regions and products after venturing into grain trading in recent years.

"We look forward to working with Cutrale-Safra to ensure a smooth transition and complete the transaction as expeditiously as possible," Ed Lonergan, Chiquita's chief executive officer, was quoted by the statement as saying.

The transaction is subject to regulatory approvals and is expected to close by the end of the year or early 2015, the statement added. (Reporting by Guillermo Parra-Bernal and Sruthi Ramakrishnan Editing by W Simon)