Del Monte to sell US Consumer Products unit for $1.67bn

Del Monte Foods, an American food production and distribution company, has signed an agreement to sell its Consumer Products business to Del Monte Pacific (DMPL) for $1.67bn.

The sale is a part of Del Monte’s strategy to focus on its pet food business and it would ensure that the company’s Pet Products and Consumer Products divisions are well positioned for growth in their respective markets.

The agreement follows a strategic review that determined a sale of the Consumer Products business to provide growth opportunities for the two businesses.

Contributing $1.8bn in annual sales to Del Monte Foods, the Consumer Products brands lead numerous packaged goods categories, including fruit and vegetable, tomato and broth.

These segments will provide DMPL with significant scale and reach, according to Del Monte.

DMPL, which is publicly traded in Singapore and the Philippines, owns the Del Monte brand in the Philippines as well as the S&W brand outside the Americas, and is an exclusive distributor of Del Monte processed products in India.

The company is majority owned by NutriAsia and it has been a long-term supplier of processed pineapple to Del Monte Foods.

Expected to be completed by early 2014, the deal would allow Del Monte to focus its resources and efforts on capturing continued growth opportunities in its Pet Products business through greater emphasis on pet snacks and the pet specialty channel.

Del Monte Foods CEO Dave West said: "For the last two years, we have made significant investments – operationally, strategically and organisationally – to build the Consumer Products and Pet Products segments into businesses capable of capturing the significant opportunity available to each.

"We believe DMPL is the right company to build on the Consumer Products segment’s recent success and achieve its next phase of growth, and we look forward to focusing on expanding our Pet Products business, which operates in one of the most attractive categories across the US consumer packaged goods industry."

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Image:The sale of Consumer Products business is a part of Del Monte’s strategy to focus on its pet food business. Photo: courtesy of Michael & Christa.