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Changes to the proposed merger between Chiquita and the Irish fruit importer Fyffes will give Chiquita shareholders a larger stake in what would become the world’s largest banana supplier.

The companies said Friday that shareholders of Chiquita Brands International Inc. will own nearly a 60% stake in the combined company under the revised all-stock deal, up from about 51%. Fyffes PLC shareholders will see their stake drop to about 40%, from more than 49%.

The boards of both companies have approved the revised deal, but shareholders still have to vote on it.

Chiquita and Fyffes announced their agreement last March. The new company will be incorporated in Dublin, where Fyffes is headquartered. Chiquita is based in Charlotte, North Carolina.

Read: New U.S. tax rules won’t halt Tim Hortons merger

Chiquita and Fyffes said last week that they may make some concessions in their agreement to ensure that it is approved by European regulators. Fyffes spokesman Seamus Keenan said the deal revision announced Friday had nothing to do with that.

He also said the revision was not motivated by new regulations announced this week by the U.S. Treasury Department that are designed to make overseas manoeuvrs like the Chiquita-Fyffes deal less lucrative.

Under a so-called “inversion,” a U.S. business will reincorporate in another country after combining with a foreign company. It is then possible to lower the U.S. tax rate of the company.

The practice has become a hot-button issue. Critics, including high-ranking lawmakers, have said that inversions create a heavier tax burden for others.

Read: What’s driving Canadian M&A activity?

Keenan said in an email the merger “is not a tax based or driven transaction.”

The companies also said Friday that they’ve agreed to increase the breakup fee Fyffes is paid if the deal is not completed.

Chiquita is still talking with two Brazilian companies that have offered to buy the U.S. banana company for $611 million. Chiquita said earlier this month that it would open its books to the investment firm Safra Group and the juice company Cutrale Group.

Chiquita shares closed at $14 on Thursday and have climbed nearly 20% so far this year.

Read: What are tax inversions?

Originally published on Advisor.ca

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