Greenyard targets U.S. market with talks to acquire Dole Food (updated)

Greenyard NV

19/12/2017 08:56

(Adds details) 
    By Alan Charlish 
    Dec 19 (Reuters) - Belgian fresh and frozen foods company 
Greenyard NV  GREENY.BR  said on Tuesday it was in advanced 
negotiations to acquire Dole Food Company  DFCI.UL , the world's 
largest fruit and vegetable producer, confirming a Reuters 
report.  urn:newsml:reuters.com:*:nL1N1OI166 
    The California-based company, one of the largest producers 
of bananas and pineapples, could be valued at more than $2.5 
billion, including debt, people familiar with the matter said on 
Monday. Greenyard has a market capitalisation of 869 million 
euros ($1.03 billion) according to Thomson Reuters data. 
    "Greenyard has secured appropriate financing, and is 
confident in its ability to complete the transaction with a 
balanced financing approach should a definitive agreement be 
reached," the company said in a statement. 
    The deal would create a company with annual revenue of 
around 8 billion euros. 
    Shares in Brussels-listed Greenyard, half-owned by the 
family of Belgian entrepreneur Hein Deprez, were up 1.9 percent 
at 0830 GMT, after a 3.3 percent rise on Monday. 
    For Dole's 94-year-old chairman David Murdock a deal with 
Greenyard would offer a quick way to cash out on his ownership 
of the California-based company, which has also been considering 
a potential initial public offering. 
    For Greenyard, an acquisitive company that started out as a 
mushroom grower in the 1980s, the deal would allow it to branch 
out into the U.S. market. It could also supply the U.S. 
businesses of existing customers such as Aldi  ALDIEI.UL , Lidl 
and Ahold Delhaize  AD.AS . 
    "It is a very fragmented fruit and veg distribution market 
they're operating in... some of the markets where they've talked 
about being more ambitious are France, the UK and the U.S., and 
certainly Dole would give them that key into the U.S.," said 
Berenberg analyst Fintan Ryan. 
    "From a strategic point of view, the acquisition would make 
sense creating a large player in both Europe and America," KBC 
analysts said in a note, adding that Greenyard would need to 
raise about 500 million euros to keep its net debt/EBITDA level 
ratio to below 3.5. 
    Dole Food Company could not immediately be reached for 
comment. 
($1 = 0.8471 euros) 
 
 (Reporting by Alan Charlish; additional reporting by Philip 
Blenkinsop in Brussels, editing by Louise Heavens) 
 ((alan.charlish@thomsonreuters.com; +48 58 772 0920;)) 
 
Keywords: DOLE FOOD M&A/GREENYARD