* Europe and Asia's top banana distributors to join forces
* Japanese firm offers 49 pct premium to share price
* Says hopes deal completed early in 2017 (Adds analyst comment, recasts)
By Conor Humphries
DUBLIN, Dec 9 (Reuters) - Japan's Sumitomo Corp has agreed to buy Fyffes for 751 million euros ($798 million) in a deal that will merge the largest banana distributors in Asia and Europe and provide a windfall to shareholders in the Irish company.
Sumitomo agreed to pay 2.23 euros per Fyffes share, 49 percent above Thursday's closing price, which analysts said reflected the relatively weak valuation of the Irish company in recent months and Sumitomo's desire to avoid being beaten in a bidding war.
The transaction comes two years after Dublin-based Fyffes tried and failed to buy U.S. rival Chiquita in order to create the world's largest banana company. Brazil's Cutrale and Safra groups scuppered the deal by offering 20 percent more.
Sumitomo said it had secured acceptances from 27 percent of shareholders, including Farringdon Capital Management and the Balkan Investment Company owned by Ireland's McCann Family, which established Fruit Importers of Ireland which merged with Fyffes in the 1980s.
Fyffe's shares were trading at 2.229 euros at 1540 GMT. The offer is more than double its share price when it attempted to buy Chiquita in 2014.
The Japanese firm said it hoped to close the deal before the end of March subject to regulatory approval. Unlike U.S. rivals such as Chiquita, Fresh Del Monte Produce Inc and Dole Food, Sumitomo has very little geographical overlap with Fyffes.
Investec said the deal at 11.1 times Fyffes' forecast 2017 earnings before interest, tax, depreciation and amortisation compared favourably to the 10.4 times paid by Cutrale for Chiquita.
"It has been trading at a discount to its true value for quite some time," said Investec analyst Ian Huggard, citing its low liquidity and small size.
"But this is a good price Sumitomo has paid. Maybe that is to forestall any thoughts of anyone else coming in" with a counterbid, he added.
The deal also represents the latest example of Japanese companies moving away from their home market, which is struggling with an ageing population and slow economic growth.
Sumitomo, which controls 30 percent of the Japanese import market and has banana plantations in the Philippines and a retail distribution network across Asia, said the deal would give it greater scale and diversity and help it to expand its produce division.
"Sumitomo is paying an attractive price for a business in which they see good long term growth potential and significant revenue synergies within the enlarged group," said Goodbody analyst Patrick Higgins.
While Asia is the fastest-growing region for sales of bananas, the world's most popular fruit, demand in Europe is growing for organic and fair trade bananas.
Other Japanese companies are looking for growth beyond their home market.
Brewer Asahi is currently bidding for its second European acquisition this year, while Ajinomoto recently agreed to take a stake in African drinks form Promasidor.
A source close to the situation predicted that this trend would continue, as Japanese entities take advantage of a strong currency to put capital to work overseas.
Fyffes was founded in London by food wholesaler Thomas Fyffe in the 1880s. It moved to Ireland a century later after merging with Fruit Importers of Ireland. Aside from being Europe's largest banana importer, it is a leading seller of pineapples, melons and mushrooms.
J.P. Morgan advised Sumitomo in the deal, while Lazard and Irish stockbroker Davy advised Fyffes.
Additional reporting by Martinne Geller and Dasha Afanasieva in London; editing by Jane Merriman and Keith Weir