Del Monte Pacific completes $1.67bn takeover of Del Monte’s US unit

Del Monte Pacific (DMPL) has completed its $1.67bn takeover of the consumer food business of American food production firm Del Monte.

DMPL chairman Rolando Gapud said, "We are very excited about this historic transaction which quadruples DMPL’s sales from $500m to more than $2bn, and fortifies DMPL’s vision of becoming a global branded food and beverage company."

The acquired entity, which will be renamed Del Monte Foods, Inc. (DMFI), will gain access to DMPL’s expertise in the Philippines, and the Asian markets.

The acquisition includes the Del Monte, S&W, Contadina and College Inn consumer food brands, which reported $1.8bn in revenues and $164m in EBITDA in 2013.

It will allow DMFI to launch new products into the US market from Asia and develop new product categories, as well as benefit from DMPL’s expertise in pineapple plantations, economies of scale, value-added expansion, including the optimisation of the latter’s operations over time.

DMFI CEO Nils Lommerin said: "This deal allows for complete focus on the strategic direction of the Del Monte brand, backed by a visionary and strategic parent in Del Monte Pacific, and positions us to capture significant growth opportunities as Del Monte Foods moves forward."

The new entity currently has less than 10% share in the canned pineapple market in the US; the company intends to focus on increasing its presence in the segment by leveraging the advantages of vertical integration and DMPL’s success in the Philippines and elsewhere.

Lommerin added: "At the appropriate time, we will position ourselves to take advantage of the rise of domestic consumption in some of the key South American countries."

DMPL, which is publicly traded in Singapore and the Philippines, owns the Del Monte brand in the Philippines and has a growing presence on the Indian sub continent through FieldFresh Foods, a joint venture with conglomerate Bharti Enterprises.

In 2007, the company acquired Del Monte’s S&W brand for the Asia, Middle East, Europe and Africa markets.

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Image: The acquisition includes the Del Monte, S&W, Contadina and College Inn brands. Photo courtesy of Ken Hammond.