Irish fruit firm Fyffes and US rival Chiquita are to merge to create the world's largest banana company, worth about $1bn (£597m).

The new firm, named ChiquitaFyffes, is expected to sell about 160 million boxes of bananas annually, more than any rival.

"This is a milestone transaction for Chiquita and Fyffes that brings together the best of both companies," said Chiquita boss Ed Lonergan.

It will be listed in New York.

In the merger, shareholders will receive shares in each firm, with Fyffes shareholders owning about 49.3% of the combined company.

Mr Lonergan said the deal would help it to save costs and expand the areas it served.

The tie-up came as Fyffes revealed that its profit before tax for 2013 rose 9.8% to 28.7m euros (£23.8m).

It said results in its banana division were "broadly satisfactory", although profits in that division were slightly down compared with 2012's strong performance.

It said "significant inflation" in the cost of fruit and the strength of the US dollar against sterling had both hit performance.

More deals expected

The global market is currently controlled by four firms - Chiquita, Dole Food Company, Fresh Del Monte and Fyffes - according to the United Nations.

"The first three [companies] on a global scale are not too far away from each other, whereas Fyffes was a good deal smaller. Now a firm number one has been created, there will be some impetus for further consolidation in the sector," said David Holohan, analyst at Merrion Stockbrokers.

The deal is expected to go through this year, but will be subject to review by competition authorities.

However, Mr Holohan said that because the two firms operated mainly in separate North American and European markets, this was unlikely to be a problem.