Dole Announces $1.7B Sale of Packaged Foods to Itochu

Dole Food Company

has reached a $1.7 billion cash deal with Itochu, selling its packaged foods and Asian fresh produce businesses to the Japan-based trading company. The deal is a step in the right direction for the world's leading fresh fruit and vegetable producer, as Dole continues restructuring it business in order to reduce costs. The deal was announced on Monday after both companies admitted to being in advanced negotiations last week. This move has been rumored since Itochu headlined as the leading company interested in acquiring Dole's businesses in a news release. As part of Dole's strategic review in May, the company announced that it wants to focus on its other businesses to seek more growth opportunities. Dole had recently been struggling with volatile demand and reduced pricing of its best-selling produce; bananas. The deal will ease the company's woes by reducing its 1.64 billion dollar debt, while aiding restructuring costs. Comparatively, Itochu has been diversifying its portfolio with overseas acquisitions. In this current acquisition, Itochu will gain all of Dole's distribution centers and plantations located all over Asia. The packaged food division includes canned, frozen and snack sales worldwide, while the Asian fresh produce market accounts for 2.5 billion dollars in revenue, according to

. Dole Food Company went public in 2009 with a $446 million Initial Public Offerng (IPO). The majority of its stakes were held by insiders. Dole is trading up about 6 percent since last week, and is up around 56.5 percent since the start of the year.