Image source: Total Produce
Dole Food Company is merging with Ireland-based Total Produce plc (OTC US: TTPPF) in a deal that would create the world’s largest fresh produce company, the two companies announced Wednesday.
The companies are already closely linked. In 2018, Total Produce bought 45% of Dole Food from billionaire David Murdock for $300 million. Carl McCann, Total Produce's chairman, became vice chairman of Dole Food as part of that deal.
The current merger, pending shareholder and regulatory approval, would create a top supplier of everything from lettuce to pineapples to avocados in Europe and North America. Besides forming a “well-balanced geographic footprint,” the combined entity is expected to save millions of dollars on synergy costs such as shipping, manufacturing plants, storage facilities and packing houses.
The combined company, to be called Dole plc, will be listed on a US stock exchange later this year with global headquarters in Dublin and American headquarters in Charlotte, North Carolina.
As part of the listing, Dole plc will raise between $500 million and $700 million, mainly to be used to pay off debt. Total Produce will also delist from the London Stock Exchange and Euronext Dublin.
McCann said in a statement, “I am confident the combined business will open new avenues of value creation for shareholders and pursue innovation in healthy nutrition for our customers worldwide.”
If approved, the deal will bring an end to Murdock’s control of Dole. After acquiring the financially teetering Castle & Cook, Dole Food's majority owner, in 1985, Murdock played a key role in turnaround efforts of the iconic food brand.
Murdock first delisted Dole Food in 2003, before taking it public again six years later. In 2013, Murdock took the company private once again, acquiring 60% of the stock in that transaction.
In recent years, Dole Food has been looking to reenter the public market as more consumers are eating less sugar and fatty foods in favor of fresh fruits and vegetables.
According to Wednesday’s announcement, the new Dole plc will have estimated revenue of $9.7 billion, almost double its nearest competitor.
Total Produce shareholders will receive 82.5% of Dole plc, while shareholders of Castle & Cooke, which owns 55% of Dole Food's parent company Dole Holdings, will get 17.5% of the new company.
Rory Byrne, chief executive officer of Total Produce, will take on that role for Dole Plc, while Johan Linden, Dole’s chief executive officer, will become chief operating officer.
Source: Equities News