US-based multinational Dole Food Company announced yesterday (25 February) that it has reached an agreement with Japanese general trading company Itochu Corporation to complete the US$1.685bn sale of its global packaged foods and Asia fresh produce business on 1 April this year.
This deal was reached at the request of Itochu, which yesterday paid Dole a non-refundable cash deposit of US$200m towards the total purchase price. Should the deal fail to close by 1 April, Dole would retain this payment to temporarily repay revolver borrowings and cover transaction expenses and general corporate purchases.
“The new Dole will have a smaller footprint as a commodity produce company with overall revenue in the $4.2bn range with two lines of business: fresh fruit and fresh vegetables,” said Dole’s Chairman, David H Murdock. “Itochu will have exclusive rights to the Dole trademark on packaged food products worldwide and on fresh produce in Asia, Australia and New Zealand. We will remain an industry leader in the sourcing, distribution and marketing of bananas, pineapples and other tropical fruits, packaged salads, fresh-packed vegetables and fresh berries.”
Under the agreement reached, Dole’s current president and chief executive officer, David A DeLorenzo, will immediately transfer to a full-time position leading the management team of the businesses being acquired by Itochu until the 1 April. After this point, he will assume a position with Itochu as the senior management of these businesses but will remain on the Dole board of directors.
Separately, Dole is currently marketing an area of land close to its Hawaii land holdings that is not being utilised currently for farming. At approximately 21,800 acres (8,822ha) in size, Dole reportedly aims to earn US$175-200m for the land.
