Dole Food in talks to sell itself to Belgium produce firm
- Greenyard, a Belgium-based produce company, said Tuesday it is in advanced talks to acquire Dole Food, according to Just Food. A final agreement has not been reached.
- Greenyard said it has the appropriate financing secured, if a definitive agreement is reached. Dole has not commented on a potential sale.
- Earlier this year, Dole reportedly was considering an initial public offering, four years after Billionaire owner David Murdock took the firm private.
If Greenyard is successful in its acquisition of Dole, there are clear benefits for the Belgium-based company. It would allow the fruit and vegetable producer to branch out to the U.S. in a big way with everything from Dole's well-known bagged salads to its bananas and pineapples. This sale also would create a dominant produce player in both the U.S. and Europe.
While many food manufacturers have been struggling, fruit and vegetable demand has grown as consumers eat less sugar and fatty foods in favor of more fresh produce. Organic, where Dole has a presence, has been among the hottest growing areas.
As for Dole, it would give chairman and owner David Murdock a relatively easy way to unload the California-based company he has been involved in for more than a decade. Dole had reportedly been considering returning to Wall Street in April. In addition, Greenyard would bring existing European-based customers, such as Aldi, Lidl, and Ahold Delhaize, to the table. This possible boost to sales would likely be very attractive to Dole, which reported a net loss of $23.7 million during the fiscal year ending on December 31, 2016.
Dole has had trouble turning the land and ship purchases it made in recent years into profits. Since being taken private four years ago, MarketWatch says Dole bought three new West Coast vessels, gaining greater control of the supply chain, and increased its acreage by 20%.
These investments were likely made in anticipation of even greater consumer demand for fresh produce. A report from the United Fresh Produce Association found fresh produce sales increased again last year — 1.5% more volume and 3.6% in weekly dollar sales. Stores, such as Wal-Mart, have in turn expanded their fresh offerings, benefiting companies like Dole.
If this deal were to go through, Greenyard would become one of the world’s largest producers of bananas and pineapples, and a leader with other fruits and fresh-packed vegetables.
“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.’ Berenberg analyst Fintan Ryan told Reuters when the potential sale was announced.
Dole has long been associated as a U.S. company with its label plastered on a bounty of fruits and vegetables in the supermarket, but this deal would give it a decisively global flavor.