Business

Sunday 24 September 2017

Revenue advises on CGT for Fyffes shareholders

(Stock picture)
(Stock picture)
Samantha McCaughren

Samantha McCaughren

The Revenue Commissioners have issued advice to shareholders of Irish fruit company Fyffes regarding the Capital Gains Tax (CGT) implications of the company's takeover.

Last December, Japanese firm Sumitomo Corporation agreed to buy the publicly quoted Dublin company for €751m. Shareholders received €2.23 per share from Sumitomo. Prior to the takeover the company was divided into three businesses.

In 2006, Blackrock was spun off from Fyffes and is now known as Balmoral International Land. In the same year, Total Produce was also spun off. In both cases shareholders received one share for each they held in Fyffes.

The formula for establishing tax on the windfall is complicated and Revenue has issued a document with a detailed breakdown of what CGT will apply.

Sumitomo is a $15bn (€14.2bn) conglomerate whose interests span finance, transport, energy, food and resources, while Fyffes had sales in 2015 of more than €1.2bn, and earnings before interest and tax of €45.8m.

The deal was overwhelmingly backed by shareholders as it offered a significant premium to the company's share price ahead of the surprise takeover announcement.

It brought to an end a listing on the Irish Stock Exchange which spanned over three decades and resulted in a €87m payment to the McCann family, who owned almost 12pc of the company. Executive chairman David McCann's (pictured) grandfather, Charles, first set up a fruit and vegetable shop in Dundalk in 1902.

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