Japanese giant aims to buy Dole's Asian fruit and veg arm
Japanese trading giant Itochu is in the final stages of its attempt to buy Dole's canned fruit and juice processing operations and the Asian fruits and vegetable division for US$1.7 billion, newspaper El Diario Nikkei reported.
Dole responded to the claims by highlighting no definitive agreements had yet been signed with the Japanese company, and it was in discussions with several other parties for the sale.
The sale is part of a strategic review to pursue spin-offs to enhance shareholder value - announced by chief executive officer David A DeLorenzo when the company released its second quarterly results on Jul. 19.
"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," DeLorenzo said at the time.
Dole posted an 18% year-on-year drop in earnings in the second quarter of this year to US$132 million, with the fresh fruit division earnings down in part due to the lower pricing of bananas in North America.
The company's earnings from fresh fruit for the second quarter of 2012 showed a 17% year-on-year decrease to US$88.9 million with packaged foods also showing a 32% drop to US$17.5 million.
Itochu said it had set up a separate company to acquire the two Dole enterprises and would announce more details once an agreement had been reached.
According to the newspaper fruit and vegetable consumption in Asia is forecast to rise 7% annually until 2016 in line with the region's growing middle class.
Itochu and Dole's business relationship dates back to 1960 when the two companies entered a partnership to sale bananas in Japan.
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