Fresh Del MonteProduce 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 deExportacion and an affiliated sales and marketingcompany, collectively known as Caribana.
The transaction is set to furtherstrengthen Fresh Del Monte's position as one of the world's leadingfresh 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 advantagesthat the acquisition of Caribana creates for Fresh Del Monte Produce,and ultimately, our customers and shareholders,' said MohammadAbu-Ghazaleh, Fresh Del Monte's chairman and chief executive officer. 'Caribana is a natural fit with Fresh Del Monte. Their productsperfectly mirror those that we currently offer.'
The takeover is expected to'substantially increase' supply of Del Monte-branded bananas and Del MonteGold Extra Sweet pineapples in Central America.'Acquiring Caribana dramatically expands our ability to supplyhigh-quality products to our customers in an environment of rapidlyrising global demand,' added Mr Abu-Ghazaleh.
Caribana's production andpacking facilities are in close proximity to Fresh Del Monte's existing Costa Ricaoperations, 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 productprocurement, inland transportation, administration and raw materials.
'Efficiency is an ongoing key area of focus for Fresh Del Monte and webelieve this transaction is a huge win, particularly in the currenteconomic climate. This deal enhances Fresh Del Monte's position tocapture the attractive opportunities that we have in markets aroundthe world as we aggressively strive to capitalize on rising demand forhigh-quality, healthful, wholesome and nutritious fresh fruit,' Mr Abu-Ghazaleh said.
The addition of Caribana's extensive production areasubstantially increases Fresh Del Monte's presence in the bananamarket and is set to further strengthens the company's position inthe gold pineapple market. Caribana sells approximately 18mboxes of bananas annually and Fresh Del Monte purchasedapproximately 5m of those boxes from the supplier last year.
The acquiredgold pineapple production, meanwhile, is estimated to be approximately 11mboxes per year.
As a resultof the acquisition, Fresh Del Monte's current land holdings in CostaRica have increased by approximately 13,000ha of quality farm land. As part of the the transaction, Fresh Del Monte also acquired state-of-the-artpacking facilities, as well as modern farming equipment.
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