Japanese trading major Itochu has disclosed that it is in advanced talks with Dole Food over the purchase of the American company’s processed foods business and Asian fruit and vegetable operation.
In a statement, Itochu, which is Japan’s fourth-biggest trading house by market value, said it was “currently negotiating the terms of ... the acquisition.” Once agreed, it is anticipated that Itochu will set up a new Tokyo-based company to handle the sale.
“The purpose of establishing the new company is to acquire the business, and to implement management judgements and administer the business smoothly and proactively,” the statement said.
If the deal goes ahead, it will mark the latest in a massive spree of overseas acquisitions by Japanese companies. The Nikkei business daily has speculated that Itochu might spend as much as US$1.7bn to complete the purchase.
California-based Dole has built a sizeable global reputation for its fresh pineapples and bananas. However, there are suggestions that this proposed purchase follows a strategic review of operations launched by the company earlier this year on the back of a slump in earnings.
The food industry has been a major target for Japanese trading houses seeking to make acquisitions over the last year. Marubeni Group had earlier announced that it had agreed to buy Gavilon Group, the American grain handler, in a deal that could possibly be worth US$5.6bn.
Although nothing has yet been signed in the Itochu-Dole deal, the Japanese company said that it will make further announcements when new details emerge, and hopes that an agreement will be in place by November this year.