Dole Food Company sold 45% of its stock for US$300 million to the European fresh produce company Total Produce.
Total Produce, one of the largest fresh produce companies in Europe, obtained a 45% stake in Dole Food Company. This transaction, worth US$300 million, brings to an end to months of negotiations, as well as speculation in the media on possible buyers and the value of Dole.
The transaction is still subject to customary closing conditions and regulatory review in the major areas where both companies operate, according to Hannes Nieuwoudt, managing director of Dole South Africa.
Nieuwoudt confirms that Dole South Africa’s business will continue as usual. “Over the past 20 years, Dole South Africa has developed a competitive marketing network in the UK and Europe. Total Produce is similarly well established in the UK, Europe and North America. This agreement will create new opportunities and unlock the potential of shared scale, costs and services as well as exploring the different sales channels that the involvement of Total Produce brings.
“Total Produce has expressed their confidence and respect for the Dole management team world-wide. We therefore do not foresee a change in the way Dole South Africa is managed,” Nieuwoudt explained.
According to a Total Produce media release, the company will share governance rights, including equal board representation. The 94-year old David Murdock, owner of Dole Food Company since 1985, will continue as the Chairman of Dole and Carl McCann, Chairman of Total Produce, as Vice Chairman of the Dole Board.
Part of the agreement is an option for Total Produce to acquire a further 6% of Dole Food Company’s stock at any time at an additional US312 million. Two years after the initial transaction, a third option becomes available to Total Produce, wherein they can acquire the balance of the Dole shares for no less than US$250 million and no more than US$450 million.
According to their website, Total Produce already does business with a few South African exporters, including Capespan, Unifrutti SA, Everseason, The Grape Company, Laeveld Sitrus, and Letaba.