TOKYO - Dole Food will sell its packaged foods and Asian fresh fruit businesses to the Japanese trading house Itochu for $1.7 billion in cash.
Dole, the world's largest fruit company, said in a news release on Monday
that it would put the cash proceeds toward paring down its debt and the costs of restructuring its struggling business.
Dole, which produces, markets and distributes fruit and vegetables, has been hit by volatile demand and lower earnings from bananas, its mainstay fruit.
The company, based in Westlake Village, California, said earlier this year that it wanted to sell its packaged food business, which includes canned fruit and fruit drinks, as well as its fresh fruit operations in Asia, as part of a companywide restructuring. Last week, the company announced that it was in advanced talks with Itochu over a deal.
The Tokyo-based Itochu, on the other hand, joins other Japanese trading houses that are taking advantage of the strong ye n and record profits to snap up companies overseas.
Dole's Asia fresh fruit business, in particular, will allow Itochu to tap into new demand from the region's growing middle class.
The deal gives Itochu, Japan's third-largest trading company, control of Dole's banana plantations and other fruit farms, canneries and processing centers in Asia, including China, the Philippines and Thailand. Itochu also will gain exclusive global rights to Dole's trademark on packaged foods, as well as fresh produce in Asia and Oceania.
Shares in Dole slipped 0.72 percent in New York to $13.70. They have gained almost 60 percent this year on its restructuring plans, share buybacks by its chairman, David H. Murdock, and anticipation of the Itochu deal.
