Dongwon completes StarKist purchase from Del Monte
October 07, 2008
by Eric Schroeder
SAN FRANCISCO — Dongwon Industries Co., Ltd. and its subsidiaries have completed the acquisition of the seafood business of Del Monte Foods Co. The transaction, which includes the StarKist business, was completed for approximately $359 million.
"We are very pleased to have successfully closed this transaction and to welcome the StarKist family to our portfolio of products," said Ingu Park, vice-chairman of Dongwon Enterprise. "StarKist, a 65-year old brand and top household name, represents a great opportunity for us to initiate operations in the United States. We will continue to leverage the value this brings as we build upon its 37% market share and No. 1 position in the shelf stable tuna category in the United States."
Rick Wolford, chairman and chief executive officer of Del Monte Foods, said the sale will improve Del Monte’s margin structure and "eliminates a source of earnings volatility and reduces debt leverage.
"This sale also increases Del Monte’s focus on faster growing, value-added, higher margin branded businesses, a key component of our accelerated growth plan," Mr. Wolford said.
As part of the acquisition, Dongwon received Del Monte’s manufacturing capabilities in American Samoa and Manta, Ecuador; and certain manufacturing assets associated with StarKist seafood located in Terminal Island, Calif., and Guayaquil, Ecuador. All of Del Monte’s direct plant personnel related to the seafood business joined Dongwon as a result of the divestiture. In addition, as a result of the transaction, Del Monte transferred to Dongwon or eliminated a total of 33 salaried positions.
Del Monte also has entered into a two-year operating services agreement with Dongwon where Del Monte will provide various operational services, such as warehousing, distribution, transportation, sales, I.T. and administration to the transferred business.