Dole completes sale of packaged foods and fresh produce businesses

US-based Dole Food has completed the sale of its worldwide packaged foods and Asia fresh businesses to Japanese trading house ITOCHU in a $1.68bn all-cash deal.

The sale includes a majority of Dole’s operations and assets, including exclusive rights to the Dole brand on certain packaged food products worldwide and on certain fresh produce in Asia, Australia and New Zealand.

Dole’s worldwide packaged foods business offers fruit parfaits, canned pineapple juice, canned pineapple, fruit juice concentrate, fruit in plastic cups, jars and pouches, healthy snack foods and frozen fruit, while its fresh produce business grows, sources and ships fresh fruit and vegetables, primarily in Asia.

Dole chairman and CEO David Murdock said the transaction folows the company’s comprehensive strategic review of its businesses announced on 3 May 2012, aimed at enhancing shareholder value, and was approved by its stockholders on 6 December 2012.

"The Dole operations will no longer include the worldwide packaged foods and Asia fresh businesses, which for fiscal 2011 represented approximately 34% of Dole’s revenues and 56% of its operating income," Murdock added.

The new Dole is expected to have a smaller footprint as a commodity produce firm with annual revenues in the range of $4.2bn with two lines of business – fresh fruit and fresh vegetables.

Dole president and chief operating officer Michael Carter said, "Dole will remain an industry leader in the sourcing, distribution and marketing of bananas, pineapples and other tropical and deciduous fruits, packaged salads, fresh-packed vegetables and fresh berries."

Dole has established a new capital structure which, together with the proceeds from the sale transaction, was used to pay off its existing debt of about $1.7bn, to pay transaction-related taxes, costs and expenses, and for the extinguishment of all of its long-term Japanese yen hedges and a European Commission fine of €45.6m.

The company noted that the proceeds also provide funding for the anticipated right-sizing of the new Dole and other post-closing restructuring expenses, and the possible resolution of the earlier Honduras tax case and the DBCP cases.

The European Commission had fined Dole Food €45.6m, for alleged anticompetitive information exchanges involving Dole Fresh Fruit Europe OHG and other EU banana importers in Germany ten years ago.

Dole Food recently announced its plans to appeal this decision at the EU Court of Justice.

Dole Food, based in Westlake Village, California, is one of the world’s leading producers and marketers of fresh fruit and fresh vegetables, with 2012 revenues from continuing operations of $4.2bn.