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McClatchy-Tribune  04/30/2014 9:34 PM ET
Chiquita was exploring merger options in 2011, filings show [The Charlotte Observer :: ]

April 30--Chiquita Brands International has been talking with an Irish produce company about a potential merger for more than two years, going back to before Chiquita moved to Charlotte, according to a securities filing Wednesday.

That differs from the account given by Chiquita CEO Ed Lonergan and Fyffes Chairman David McCann in March, when the deal was announced. At the time, they said discussions between Chiquita and the Dublin-based produce company started last fall.

Wednesday's securities filing, however, says the discussions between the two companies started in late 2011. That's when the company was finalizing its plans to move from Cincinnati to Charlotte, lured in part by almost $22 million worth of state and local incentives.

The proposed $1 billion, all-stock merger would create the world's largest banana company, ChiquitaFyffes, based in Dublin, Ireland. McCann is set to lead ChiquitaFyffes, although some top executives and hundreds of workers are expected to remain in Charlotte.

As part of the incentives deal, Chiquita was supposed to keep its headquarters in Charlotte for at least 10 years. Local officials haven't decided yet whether they will seek to stop incentive payments or try to recoup any of the $1 million in local funds already paid. Chiquita says it has met its job targets to receive incentive payments so far, with about 320 workers uptown.

The companies expect to close the merger deal later this year, after securing approval from regulators and shareholders.

Chiquita spokesman Ed Loyd said Wednesday that Lonergan's previous comments about the deal's origin referred only to the most recent round of talks with Fyffes -- not previous, inconclusive talks.

"There should be no surprise that our company and others have had discussions over the years that have not led to a transaction," said Loyd. He said "no one had envisioned" the merger scenario announced in March at the time the company was considering moving to Charlotte in 2011.

"We expended $35 million to do so, and clearly there isn't a business that would make that type of decision if this had been on the horizon at that time," said Loyd.

When the Charlotte City Council approved its share of incentives in a 2011 closed session, former City Council member Edwin Peacock was one of three members who voted against the deal. Peacock said Wednesday that he had heard no discussion at the time that Chiquita might merge with another company.

"No, not at all," said Peacock. "This was clearly an organization that was very comfortable negotiating for money, whether they needed it or not."

Chiquita received a $2.5 million state grant and $2.5 million worth of incentives each from Charlotte and Mecklenburg County. The biggest piece of incentive money for Chiquita, more than $16 million, is from a 75 percent state rebate on payroll taxes for the Charlotte employees.

Officials with Charlotte and Mecklenburg County have met with Chiquita over the past week, city Economic Development Manager Brad Richardson said. They plan to meet with the company several more times over the coming months to review the incentives and decide whether to try to get any money back.

Behind the scenes

The securities documents filed Wednesday show Chiquita was considering merger options even as Charlotte officials celebrated the company's decision to move from Cincinnati.

In May 2011, Charlotte Chamber officials were approached in secret about the possibility of Chiquita moving its headquarters. After five months of meetings with officials from former Gov. Bev Perdue on down -- and a lobbying push that included a scramble for financial incentives and dinner with former Bank of America CEO Hugh McColl Jr. -- Chiquita announced it was moving to Charlotte.

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