By Elliot Golan Staff Reporter
Dole Food Co., the Westlake Village fruit and vegetable grower, is one step closer to shedding its packaged foods and Asia fresh produce business, the company said Wednesday.
The company said that its sale of these businesses to Japanese ITOCHU Corp., which was originally announced in September, will be completed early this year. The deal is valued at almost $1.7 billion.
Since the sale was made public, Dole has faced regulatory hurdles in China over antitrust concerns. But the company said in a statement Wednesday that the Chinese Ministry of Commerce has accepted antitrust filings, which would allow the deal to move forward.
Dole stock has suffered since the sale was announced, dropping almost 30 percent since Oct. 1.
The packaged food division includes canned fruits, fruit juices, snack foods and frozen fruits. After the sale, ITOCHU will have the right to use the Dole trademark worldwide.
The company will have its footprint significantly reduced by the deal, with only fresh fruit and fresh vegetable business remaining.
Dole also said Wednesday that a previously announced $400 million loan is being finalized. Combined with the sale proceeds, the loan will allow the company to pay off its debt and provide funding for its new, smaller identity.
Dole has attempted to calm worries about its slipping stock price by attributing sale difficulties on the struggling economy and impact of Typhoon Bopha, which struck banana growing operations in the Philippines Dec. 4.
The sale will be followed by a realignment of Dole’s corporate structure around the world, which the company expects to result in an aggregate cost savings of nearly $50 million a year.
Shares of Dole fell $1.42, or more than 12 percent, to $10.05 in mid-day trading on the New York Stock Exchange Wednesday.