Del Monte Foods is selling its consumer canned products business and brand names Del Monte, Contadina, College Inn and others for $1.675 billion to concentrate on its growing pet products business.
The impact of the transaction on the food maker's 330 employees in the Del Monte Center on Pittsburgh's North Shore is unclear.
The purchaser is unrelated Del Monte Pacific Ltd. of the Philippines, which does not have a consumer presence in the United States.
It said the acquisition of Del Monte Foods' canned fruit, vegetable and broth businesses in the United States will "reunite Del Monte Pacific with U.S. mother brands and opens access to the U.S. packaged food market," adding sales of $1.8 billion and operating profit of about $180 million.
Del Monte Foods workers in Pittsburgh are split between both the consumer business to be sold and the pet food business. How the companies will reorganize consumer employees in Pittsburgh and at Del Monte Food's San Francisco headquarters will be determined after the deal closes. The company said it intends to change its name to reflect its new focus on pet products.
Del Monte employees outside the company's building declined to give their names, and said they attended meetings about the sale with supervisors. "A lot of people are wondering what will happen," said a young man who works on a computer help desk.
In a statement, Del Monte Pacific said, "the acquired consumer food business will be managed under a separate platform and will be led by a U.S.-based CEO and management team. It is expected that the operating organization of Del Monte Food's consumer food division will largely transfer to (Del Monte Pacific) together with the assets and operations of the business."
The two companies announced the sale late Thursday. Del Monte Foods Pittsburgh operations center shares the building with Root Sports Pittsburgh and Peoples Natural Gas. The building opened in 2006.
Del Monte Pacific owns the Del Monte brand in Asia, and has leading market shares for canned pineapple juice and juice drinks, canned pineapple and tropical mixed fruits, tomato sauce, spaghetti sauce and tomato ketchup.
Del Monte Foods' consumer business has a leading market position in canned fruits and vegetables in the United States and generates about half of the company's total annual sales of $3.8 billion. Del Monte Foods is the operating name for Del Monte Corp., which is also not related to Fresh Del Monte Product Inc.
"Over the last two years, we have made significant investments - operationally, strategically and organizationally - to build the consumer products and pet products segments into businesses capable of capturing the significant opportunity available to each," said CEO Dave West, who joined the company from Hershey Foods Inc. in 2011.
"We believe Del Monte Pacific is the right company to build on the consumer products segment's recent success and achieve its next phase of growth, and we look forward to focusing on expanding our pet products business."
Del Monte's pet food products and snack brands include Meow Mix, Kibbles 'n Bits, Milk-Bone, 9Lives, Natural Balance, Pup-Peroni, Gravy Train, Nature's Recipe and others. The company also produces and distributes private label pet products and food products.
This article was written by Channel 11's news exchange partners at TribLIVE.
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