Fresh Del Monte Produce has acquired Costa Rican tropical fruit supplier Caribana, including banana producer Frutales and gold pineapple producer Frutex, in a deal worth some US$403m.
In a statement published this morning, the company confirmed it had agreed a deal to acquire all of the shares in banana producer Desarollo Agroindustrial de Frutales, pineapple producer Frutas de Exportacion and an affiliated sales and marketing company, collectively known as Caribana.
The transaction is set to further strengthen Fresh Del Monte's position as one of the world's leading fresh produce companies, bolstering its position as a major supplier of bananas and pineapples to existing North American and European markets and enabling it to target new sales opportunities.
"We are enthusiastic about the financial and operating advantages that the acquisition of Caribana creates for Fresh Del Monte Produce, and ultimately, our customers and shareholders," said Mohammad Abu-Ghazaleh, Fresh Del Monte's chairman and chief executive officer. "Caribana is a natural fit with Fresh Del Monte. Their products perfectly mirror those that we currently offer."
The takeover is expected to "substantially increase" supply of Del Monte-branded bananas and Del Monte Gold Extra Sweet pineapples in Central America. "Acquiring Caribana dramatically expands our ability to supply high-quality products to our customers in an environment of rapidly rising global demand," added Mr Abu-Ghazaleh.
Caribana's production and packing facilities are in close proximity to Fresh Del Monte's existing Costa Rica operations, offering significant opportunity for cost saving and economies of scale, particularly through increased utilisation of vessels and warehouse facilities, the company said. The group will also look to generate cost savings in product procurement, inland transportation, administration and raw materials.
"Efficiency is an ongoing key area of focus for Fresh Del Monte and we
believe this transaction is a huge win, particularly in the current
economic climate. This deal enhances Fresh Del Monte's position to
capture the attractive opportunities that we have in markets around
the world as we aggressively strive to capitalize on rising demand for
high-quality, healthful, wholesome and nutritious fresh fruit," Mr Abu-Ghazaleh said.
The addition of Caribana's extensive production area substantially increases Fresh Del Monte's presence in the banana market and is set to further strengthens the company's position in the gold pineapple market. Caribana sells approximately 18m boxes of bananas annually and Fresh Del Monte purchased approximately 5m of those boxes from the supplier last year.
The acquired gold pineapple production, meanwhile, is estimated to be approximately 11m boxes per year.
As a result of the acquisition, Fresh Del Monte's current land holdings in Costa Rica have increased by approximately 13,000ha of quality farm land. As part of the the transaction, Fresh Del Monte also acquired state-of-the-art packing facilities, as well as modern farming equipment.