Itochu Corp to buy two units of Dole Food Co for $1.68 bn

Japanese trading house Itochu Corp today agreed to buy the worldwide packaged foods and Asia fresh produce businesses of struggling Dole Food Company Inc, for $1.685 billion in cash.

Under the deal, Tokyo-based Itochu will have exclusive rights to the Dole trademark on packaged food products worldwide and on fresh produce in Asia, Australia and New Zealand.

Dole, the world's largest producer and marketer of fresh fruit and fresh vegetables, and the leading producer of organic bananas and organic pineapples, had in May said that it would sell or spin off its packaged foods business.

"When we announced our strategic business review in May, we stated that we would review a broad range of strategic alternatives for our businesses with the goal of enhancing shareholder value,'' said David DeLorenzo, Dole's president and CEO of Dole.

"We are realising a premium valuation for our worldwide packaged foods and Asia fresh produce businesses and will retain a strong fresh produce business that has increased financial flexibility to grow."

Dole said that the cash proceeds from the deal will be used to reduce its debt, pay deal-related expenses, and for restructuring and other corporate purposes.