Dole and Total Produce Announce Merger Plan

This deal will create the world's largest fruit and vegetable company with combined annual sales of nearly $ 10 billion. "

TOtal Produce and Dole have announced plans to merge, an agreement that will create the world's largest fresh produce company with estimated combined revenues of approximately $ 9.700 billion.

The Irish multinational Total Produce, which acquired a 45 percent stake in US fresh produce giant Dole in July 2018 , will assume the Dole name once the merger is complete. The new company will be listed in the US but its global headquarters will be in Dublin. Its headquarters for the Americas will be in Charlotte, North Carolina.

As a result, the group will benefit from a simplified ownership structure, full operational integration, and various advantages and economies associated with operating an expanded business.

Commenting on the announcement, Total Produce President Carl McCann said: “I am delighted with this transaction, which combines two highly complementary premium businesses to create the world leader in fresh produce. I am confident that the combined business will open up new avenues of creating value for shareholders and will seek innovation in healthy nutrition for our customers around the world. "

He added that it was also an "exciting next step" for Dole. “The combined company will become the largest global player with more than 170 years of fresh produce history at both companies, a highly diversified portfolio, resilient earnings and a strong balance sheet that positions us well for accelerated growth,” he said. "We look forward to beginning this next chapter and providing greater opportunities for our shareholders, dedicated employees, customers, suppliers and partners."

Savings and benefits

The savings involved are likely to be considerable for two companies that made pre-tax profits of about $ 379 million in 2020 and have total combined assets worth about $ 4.500 billion. 

In a statement, they said that the transaction could generate "significant EBITDA synergies" of between US $ 30 million and US $ 40 million in the medium term from what they described as "revenue expansion and cost optimization" in products, regions, sourcing and supply chains. 

Assuming the deal goes through, Dole will complete an initial public offering and a listing on a major US stock exchange. Its goal is to raise between $ 500 and $ 700 million in primary equity capital.

Practical changes

The new Dole will also intensify the development of high-growth products such as avocados and berries, as well as organic products. 

At the same time, the strength of the Dole brand in more established categories such as bananas, pineapples and fresh vegetables should not be underestimated. It is understood that the Dole label will be promoted in conjunction with some of Total Produce's own brands. 

Also on the ground, there will be opportunities for more effective collaboration between different parts of the business, for example using existing infrastructure and distribution networks in key markets in North America and Europe, and coordinating their transportation and logistics over close. 

By working closer together in regions such as the UK, France and Spain, the Dole and Total Produce divisions will be able to further increase their sales, the group said. 

They will also collaborate more when sourcing from key production regions like Chile and South Africa.

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