Del Monte Pacific Ltd., the Philippines-based fruit juices company, agreed to buy the consumer foods business of US food maker Del Monte Products Inc. for $1.68bn.
The all-cash deal between the two unaffiliated companies gives the Asian firm rights to the Del Monte, Contadina, S&W and College Inn food brands in the U.S. With the sale, Del Monte Foods Consumer Products will change its name and focus on its pet food business.
The acquisition gives Del Monte Pacific the No. 1 branded position in the canned fruits and vegetables category in the United States, along with an additional net sales of $1.8bn. The deal also gives the firm an opportunity to offer some of its own products to the large and fast-growing Asian and Hispanic populations in the United States, according to a statement.
“The US was one of few key markets where our company did not have a direct presence nor have its own brands", said Del Monte Pacific chairman Rolando Gapud.
The deal is being funded through equity in the acquired company in addition to $930m in debt financing through a group of banks.
The transaction is subject to regulatory approvals and customary closing conditions and expected to close early next year.