Dublin-headquartered Dole has sold its fresh vegetables division to a subsidiary of US fruit group Chiquita for about $293 million (€270m). Total Produce, originally a spin-off of Irish fruit company Fyffes, completed the acquisition of Dole Foods in July 2021, creating Dole, which is now the largest supplier of fresh fruit and vegetables in the world.
Dole said on Tuesday that some of its subsidiaries have entered into a definitive agreement to sell its fresh vegetables division to an affiliate of Fresh Express, which is a wholly-owned subsidiary of Chiquita. The deal is in cash subject to certain adjustments.
The fresh vegetables division comprises operations related to the processing and sale of whole produce such as iceberg, romaine, leaf lettuces, cauliflower, broccoli, celery, asparagus, artichokes, green onions, sprouts, radishes, and cabbage, as well as salads and meal kits.
In the financial year ended December 31st, 2021, the division reported revenue of $1.28 billion. The business has agricultural operations and four processing plants across the United States and employs more than 3,000 people.
Net proceeds from the sale are expected to be used primarily for debt reduction of Dole. The transaction is subject to regulatory approval and the parties expect that the transaction will close after approval is obtained, subject to customary closing conditions.
Carl McCann, executive chairman of Dole, said: “We are pleased to announce the sale of our fresh vegetables division. Combining with Fresh Express will improve the offering and service to customers and consumers through increased investments in innovation, efficiencies, and food safety. We believe the sale of this division will strengthen our financial position and increase the group’s focus on and investments in our core activities.”
Chiquita chairman Jose Luis Cutrale Jr said the deal would “help drive growth in the entire produce industry and support higher demand for our valued produce grower base in California, Arizona, Colorado, Florida and across the entire USA”.
“The combination of both businesses, when consummated, will allow us to continue to create the best products under the Fresh Express umbrella,” he said. “The anticipated cost savings from this combination will help partially mitigate the recent period of inflationary pressures experienced throughout the produce, food and beverage sectors of the economy. We aim to bring an improved value proposition to the consumer while allowing us to better manage the shortage of agricultural and manufacturing labour, supply chain challenges and water issues.”