WESTLAKE VILLAGE, CALIF. — Japanese-based Itochu Corp. has entered an agreement to acquire the worldwide packaged foods and Asia fresh produce businesses of Dole Food Company, Inc. for $1.685 billion.
“When we announced our strategic business review in May, we stated we would review a broad range of strategic alternatives for our businesses with the goal of enhancing shareholder value,” said David A. DeLorenzo, president and chief executive officer of Dole. “We believe this proposed transaction accomplishes that. We are realizing a premium valuation for our worldwide packaged foods and Asia fresh produce businesses and will retain a strong fresh produce business that has increased financial flexibility to grow.”
The transaction is subject to stockholder and regulatory approval and is expected to be completed in the fourth quarter of fiscal 2012.
Dole Worldwide Packaged Foods produces canned pineapple, canned pineapple juice, fruit juice concentrate, fruit in plastic cups, jars and pouches, as well as fruit parfaits, healthy snack foods and frozen fruit. Dole Asia Fresh Produce grows and distributes fresh fruit and vegetables primarily in Asia. These businesses had combined revenue of about $2.5 billion in 2011.
Dole will remain an international company as it will keep its North American fresh vegetables business as well as its fresh fruit businesses in North America, Latin America, Europe and Africa. These businesses had about $4.2 billion in revenue in fiscal 2011.
Also with this transaction the company will recapitalize its debt structure and adopt cost-savings initiatives and corporate restructuring.
“The consummation of this transaction will result in a more focused Dole that retains significant scale with more than $4 billion in revenue and a rich asset base,” said David H. Murdock, chairman of Dole. “With a substantial reduction in debt and the expected cost savings, Dole will also be well positioned to take advantage of growth opportunities within the fresh produce category.”