Del Monte Pacific to buy US food brands
MANILA, Philippines – Publicly listed Del Monte Pacific Ltd. (DMPL) of the Campos family agreed to buy the consumer food business of privately held US foodmaker Del Monte Foods Company.
In a disclosure to the Philippine Stock Exchange on Friday, October 11, DMPL said it signed an agreement with Del Monte Foods to acquire its consumer food business for $1.68 billion.
DMPL is a Philippines-based producer of pineapple, pineapple juices, tomato sauce and ketchup. READ: Del Monte to focus on branded products
Del Monte Foods, on the other hand, owns the brand rights for Del Monte, S&W and College Inn food products in the US and South America.
DMPL chairman Rolando Gapud said the deal gives the company access to the US market and additional sales of $1.8 billion.
"This landmark transaction offers DMPL greater access to a well-established, attractive and profitable branded consumer food business in the world’s biggest market. Prior to this acquisition, the US was one of few key markets where our company did not have a direct presence nor have its own brands," Gapud stressed.
DMPL said it will finance the acquisition through equity in a subsidiary formed to run the consumer food business. It will also secure a long-term loan worth $930 million from banks.
DMPL will also assume some of the consumer food business' liabilities in the US and equity interests in certain South American units.
The deal is subject to regulatory approvals and closing conditions. It is expected to close not later than the first quarter of 2014.
DMPL is listed on the Philippine and Singapore stock exchanges. – Rappler.com
Handshake Image from Shutterstock