US-based Dole Food is in advanced talks with Japanese trading house Itochu over the sale of its packaged foods and Asian fresh fruit and vegetable businesses.
Itochu could pay about $1.7bn for the businesses, reported Reuters citing sources familiar with the matter.
Dole said in a statement that no definitive agreements have been signed at this time, and it is continuing discussions with several other parties regarding these assets and others.
Dole Food's packaged foods business offers canned pineapple, fruit juice, canned pineapple juice, concentrate, fruit in plastic cups and other packages and frozen fruit.
Its Asian fresh fruit and vegetable businesses sell fresh bananas, pineapples and berries, and more than 20 types of fresh vegetables including bagged salads.
If the deal is successful, Itochu plans to establish a new company to manage the businesses it acquires from Dole. The new company is scheduled to be set up in November 2012.
In May 2012, Dole Food began evaluating strategic options. In July 2012, it noted that it is evaluating a complete or partial separation of one or more of its businesses, including potential spin-offs, sales transactions and joint ventures, and hired Deutsche Bank Securities and Wells Fargo Securities to review alternatives.
Dole, which distributes fruits and vegetables, has struggled with volatile demand and lower earnings in 2011. For the second quarter ended 16 June 2012, it reported that its net income from continuing operations fell about 21% to $66m.
