Wednesday 21 August 2019

'Mixed emotions' as McCann family Fyffes link broken

Executive chairman of Fyffes, David McCann
Executive chairman of Fyffes, David McCann
John Mulligan

John Mulligan

With Japanese firm Sumitomo having agreed yesterday to pay €751m for Fyffes, it brings to an end the McCann family ownership links to the business that stretch back over 60 years.

But Fyffes itself has been on the go for more than a century, beginning life in 1888 as EW Fyffe & Son in London.

In 1902, Charles McCann established a greengrocers on Clanbrassil Street in Dundalk, becoming the first agent for Fyffes in Ireland.

The McCann family have led Fyffes since the 1950s, and the firm became a major player in the global fruit sector. When the company floated on the stockmarket in 1981, it had annual sales of just €30m. Last year, it had sales of €1.2bn and profits of €46m.

It distributes about 47 million cases of bananas a year in Europe, and a US subsidiary distributes 10 million a year in America. Fyffes also distributes 10 million cases of pineapples a year, and 17 million cases of winter melons in the United States. But there have been skids along the way. The most recent was the abandoned $1bn planned merger between Chiquita and Fyffes.

There was also an alleged insider-dealing case. Fyffes sued DCC and its then ceo, Jim Flavin, in 2002, claiming that DCC and Mr Flavin (a former Fyffes director), had been in possession of price-sensitive information when DCC sold its stake in Fyffes a month before a March 2000 profit warning, making a profit of €85m.

The High Court found in favour of Mr Flavin, but in 2007, that ruling was overturned by the Supreme Court.

A report into the matter by the Office of the Director of Corporate Enforcement into the events surrounding the share sale found no evidence that anything illegal had taken place. In 2008, DCC agreed to pay Fyffes over €37m in a full settlement.

Speaking to the Irish Independent yesterday, Fyffes executive chairman David McCann - the grandson of Charles McCann - was pragmatic about the business being sold.

He admitted there were "mixed emotions" about the takeover, but said the new Japanese owners would be a good fit for the Irish business.

"It's also a tribute to those who built a fine company in the past that we're able to be here today," he said.

"I obviously only know the Sumitomo guys from relatively recently, but we think the same about what kind of development is desirable in the industry," he said.

"The kind of projects that we would be looking at internally are also the kind of projects that they would be thinking about."

David Holohan, chief investment officer at Merrion Stockbrokers, likened the takeover of Fyffes to the €1.3bn acquisition of Aer Lingus last year by IAG.

"In the case of Aer Lingus it has worked out fantastically. In the case of Fyffes under Sumitomo, it will result in Fyffes boosting its acquisitions and overall scale," he said.

Irish Independent

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