Fyffes' shares rocket after bananas deal from Sumitomo

 
Oliver Gill
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Afternoon Foursomes - 2014 Ryder Cup
Fyffes' shareholders will be celebrating today (Source: Getty)

A lot people seem to think 2016 was the year when the world went bananas. And today, investors in them will be going bananas too.

Sumitomo, one of Japan's largest conglomerates, revealed it was splashing out €751m (£631m) to buy Irish banana giant Fyffes.

Read more: How bananas could one day cure the flu

Offering shareholders €2.23 a share, the deal is whopping 49 per cent higher than Fyffes' closing share price yesterday evening. Shares in the firm went, well... bananas, rocketing over 57 per cent, after investors were told they'd also receive a dividend of a further €0.02 a share.

Among the trading melee, Fyffes chairman managed to contain his excitement, calling the transaction "a compelling proposition for our shareholders and crystallises the substantial value [for shareholders]".

There isn't much worse than a bad banana

Sumitomo is sitting on approximately $8bn of cash, and said it has been active in the banana industry since the 1960s. The group currently imports 30 per cent of the all of the bananas coming into Japan.

Fyffes has been on a spending spree itself this year, making not one, but two, forays into the mushroom market. It bought Canada's All Seasons for CA$59m and Highline Produce Limited for CA$145m.

​In 2014, Fyffes excited the market with its proposed $1bn merger with Chiquita, a deal that never came to fruition.

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