Greenyard targets U.S. market with talks to acquire Dole Food

[December 19, 2017]   By Alan Charlish

(Reuters) - Belgian fresh and frozen foods company Greenyard NV said on Tuesday it was in advanced negotiations to acquire Dole Food Company [DFCI.UL], the world's largest fruit and vegetable producer, confirming a Reuters report.

The California-based company, one of the largest producers of bananas and pineapples, could be valued at more than $2.5 billion, including debt, people familiar with the matter said on Monday. Greenyard has a market capitalization of 869 million euros ($1.03 billion) according to Thomson Reuters data.

"Greenyard has secured appropriate financing, and is confident in its ability to complete the transaction with a balanced financing approach should a definitive agreement be reached," the company said in a statement.

The deal would create a company with annual revenue of around 8 billion euros.

Shares in Brussels-listed Greenyard, half-owned by the family of Belgian entrepreneur Hein Deprez, were up 1.9 percent at 0830 GMT, after a 3.3 percent rise on Monday.

For Dole's 94-year-old chairman David Murdock a deal with Greenyard would offer a quick way to cash out on his ownership of the California-based company, which has also been considering a potential initial public offering.

For Greenyard, an acquisitive company that started out as a mushroom grower in the 1980s, the deal would allow it to branch out into the U.S. market. It could also supply the U.S. businesses of existing customers such as Aldi [ALDIEI.UL], Lidl and Ahold Delhaize.

A Dole vessel transporting containers with boxes of bananas is anchored at Dole's Port in Guayaquil, Ecuador, February 23, 2012. REUTERS/Guillermo Granja/File Photo

"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., and certainly Dole would give them that key into the U.S.," said Berenberg analyst Fintan Ryan.

"From a strategic point of view, the acquisition would make sense creating a large player in both Europe and America," KBC analysts said in a note, adding that Greenyard would need to raise about 500 million euros to keep its net debt/EBITDA level ratio to below 3.5.

Dole Food Company could not immediately be reached for comment.

($1 = 0.8471 euros)

(Reporting by Alan Charlish; additional reporting by Philip Blenkinsop in Brussels, editing by Louise Heavens)

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