Del Monte Pacific completes purchase of Del Monte US

MANILA, Philippines - Fruit and juice processing giant Del Monte Pacific Ltd. (DMPL) has completed the acquisition of the consumer food business of US-based Del Monte Foods (DMF) for nearly $1.7 billion.

This will jumpstart the transformation of DMPL into a global branded food and beverage firm with sales of more than $2.3 billion, the company said.

In a regulatory filing, DMPL said it has finalized the $1.675-billion purchase of DMF’s consumer food business, which will be renamed Del Monte Foods Inc. (DMFI).

“DMF, with a 26 percent share in the canned fruit market in the US, will provide DMPL with a solid growth platform and supplement our achievements in the expanding markets of Asia,” said DMPL chairman Rolando Gapud.

“It will also provide longer-term opportunities in the emerging markets of South America,” he added.

The acquisition was financed partly by bridge loans. In particular, the final financing structure provides for a total equity investment of $705 million into DMFI, of which $605 million is in the form of fresh capital and the balance from loans, DMPL said.

The transaction boosts DMPL’s sales to more than $2 billion and cements the company’s vision of becoming a global branded food and beverage company, Gapud said.

In October, DMPL announced the acquisition which is expected to give DMPL access to the profitable US and South American markets.

DMPL owns the Del Monte brand in the Philippines where it is the market leader across major food and beverage categories. The brand also has a growing presence in India through FieldFresh Foods, DMPL’s joint venture with Indian conglomerate Bharti Enterprises.

For its part, DMF owns the Del Monte brand rights for processed food products in the US and South America. The firm earlier claimed to hold the top spot in major canned fruit and vegetable categories in th US and top two in canned tomato and broth categories.

The Singapore and Philippine-listed DMPL said the buy-in adds significant scale and reach into new market segments for the company, which has been a longtime supplier of processed pineapple to the US.

DMPL’s 23,000-hectare plantation in Mindanao is the world’s largest fully integrated pineapple operation with a 750,000-metric ton processing capacity.

Its principal shareholder, NutriAsia, leads the Philippine market for condiments (Datu Puti and UFC), specialty sauces (Jufran and MangTomas) and cooking oil (Golden Fiesta).