Fyffes said yesterday that it has acquired 60 per cent of Nolem, the largest melon producer and exporter in Brazil.

The company, which owns five thousand hectares of farmlands in Brazil and markets nine million boxes of melons per annum, has net assets of around €11.3 million.

Fyffes did not disclose how much it had paid for the stake but it is believed to have been less than this figure.

The business will continue to be managed by Andre, Marcelo and Eduardo Gadelha, whose family retains 20 per cent of the company.

Analysts described the deal as a small one for Fyffes. "It slots into their tropical division along with pineapples and bananas," said Liam Igoe, analyst with Goodbody Stockbrokers.

Shares in Fyffes lost five cent, or 2.2 per cent, to €2.25 yesterday as investor focus remained on the company's plans to transfer its property assets into a new separate, publicly-quoted company, Bluestone Properties.

Fyffes will hold an extraordinary meeting of shareholders next month to approve the plan prior to listing Bluestone on London's AIM market and the IEX market in Dublin.

Meanwhile, the company's core fruit business faces a number of challenges, including a €40 million increase in duty costs due to reform of the EU banana regime as well as higher shipping and fuel costs due to the price of oil.