Del Monte Pacific to buy US-based Del Monte's consumer food business for $1.68 bn
11 Oct 2013
Singapore-listed Del Monte Pacific Ltd (DMPL), a food and beverages company majority-owned by the Campos family of the Philippines, yesterday struck a deal to buy the consumer food business of US-based Del Monte Foods Consumer Products Inc, for $1.68 billion.
The two companies are not related to each other. Philippines-based Del Monte Pacific is 79-per cent-owned by NutriAsia Pacific Ltd, which in turn is owned by the NutriAsia Group of Companies where the Campos family holds a majority stake. Del Monte Pacific is the smallest of the various Del Monte brand-owning companies.
The other unrelated Del Monte companies are Del Monte Foods, Fresh Del Monte Produce, Inc., Del Monte International, Del Monte Asia Pte Ltd, with various subsidiaries or affiliates (See: Del Monte who? Del Monte Pacific). In Canada the Del Monte brand is owned by ConAgra Foods.
Under the current deal, Del Monte Foods is selling its consumer products business in order to focus on its pet products business, an annual $20 billion industry.
Del Monte Foods said that this agreement comes after it conducted a strategic review that determined a sale of the consumer products business provided the best opportunities for the growth of the company's two differentiated business portfolios.
''Given the distinct operations and markets of Del Monte Foods' two segments, pet products and consumer products, a sale of the consumer products segment to DMPL will ensure that both business units are best positioned for growth in their respective markets,'' Del Monte Foods said in a statement.
After deal closure, Del Monte Foods will change its name to reflect its focus on the pet products market.
The deal will give Del Monte Pacific the rights to brands including Del Monte, Contadina, College Inn, and S&W processed food product brands in the US and South America, which generate annual sales of approximately $1.8 billion.
Del Monte Foods' consumer products brands hold leading positions in numerous packaged goods categories, including No1 branded market share positions in major fruit and vegetable categories and No 2 positions in tomato and broth categories.
''We believe DMPL is the right company to build on the Consumer Products segment's recent success and achieve its next phase of growth, and we look forward to focusing on expanding our Pet Products business, which operates in one of the most attractive categories across the US consumer packaged goods industry,'' said, Dave West, CEO of California-based Del Monte Foods.
Del Monte Pacific also holds the exclusive rights to produce and distribute food and beverage products under the Del Monte brand in the Indian sub-continent. It owns Del Monte Foods India Pvt Ltd, which is engaged in the production, distribution and sale of processed fruit and vegetable products.
Del Monte Pacific has been present in India through a joint venture with Bharati Enterprises, called Fieldfresh Foods, since 2007.
On the other hand, Del Monte Foods became part of R.J. Reynolds Industries, (later RJR Nabisco, Inc.) in 1979. Ten years later, the fresh fruit business was sold and renamed Fresh Del Monte Produce. Although no longer affiliated with Del Monte Foods, Del Monte Produce continued to market pineapples, bananas, and other produce under a licensing agreement for the Del Monte label.
RJR Nabisco sold the remaining food processing divisions, known as Del Monte Foods, to private investors in 1989. Del Monte Foods again became a publicly traded company in 1999, and in 2002, it purchased several brands from US food giant Heinz in an all-stock transaction that left Heinz shareholders with 74.5 per cent of Del Monte and original Del Monte shareholders with 25.5 per cent of the company, and nearly tripled Del Monte Foods' size.
In 2010 US-based Del Monte Foods Company sold itself to a consortium of private equity firms led by Kohlberg Kravis Roberts & Co (KKR), for about $5.3 billion in cash (See: Del Monte Foods to be acquired by KKR-led PE firms for $5.3 billion) in among the largest leveraged buyouts of the year.
Del Monte Foods' stock was delisted from the New York Stock Exchange prior to the start of trading on 9 March 2011.
