Itochu to buy Dole's Asian fresh business

For fresh produce marketing in Australia and New Zealand
Mike Knowles

BY MIKE KNOWLES

@mikefruitnet

Itochu to buy Dole's Asian fresh business

Japanese trading group reportedly ready to invest US$1.7bn to acquire Dole divisions, including global packaged goods arm

Itochu to buy Dole's Asian fresh business

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Dole Food Company is understood to be in advanced talks with Japanese trader Itochu Corporation about a possible sale of its Asian fresh fruit and vegetable division, as well as its global packaged goods arm, in a deal purported to be worth a possible US$1.7bn (€1.4bn).

Dole has come under pressure over the past year in particular as a result of low prices for bananas – its main product – and commodity vegetables in several of its international market, prompting it to consider selling off parts of its business.

Chief executive David DeLorenzo confirmed back in May that Dole was to undergo a complete strategic review of its business, a move that would potentially result in the separation of some of its business units.

Then in July, announcing a 10 per cent fall in revenues to US$1.7bn (€1.4bn) during the second quarter, DeLorenzo added: "We are exploring transactions that may include a full or partial separation of one or more of our businesses through a spin-off or other capital markets transaction, as well as joint venture and sale transactions."

Eurofruit understands that the group also continues to consider its options with regard to the proposed divestment of its distribution company in Germany.

Although no definitive agreement has yet been reached between Dole and Itochu, theoretically leaving the door open for other interested parties to enter negotiations, Itochu has already put plans in place to set up a new company in November to acquire the two divisions.

Itochu makes most of its money from metals, but around 15 per cent of its projected ¥200bn (€1.99bn) net profit for the year to March 2013 is expected to come from its food business, Reuters reported.

Dole sells fresh bananas, pineapples and berries in Asia, as well as fresh vegetables and bagged salads.

Its packaged foods division sells products including tinned pineapple, tinned pineapple juice, fruit juice concentrate, fruit cups and frozen fruit. 

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