Spanish food group Ebro Puleva has said it has reached an in-principle agreement with a Canary Islands-based group for the sale of Ebro's subsidiary Catesa Foods.

The agreed price amounts to €31.5m (US$37.9m), to be paid in two instalments: around 50% within year 2005 and the remaining amount upon completion of the due diligence process (expected January 2006).

Catesa Foods deals with the operation, culture and trading of tropical fruits, flowers and ornamental plants on Tenerife Island.

The Spanish company said the transaction fits into its strategic plan to focus on its main activities, to optimise structure costs, to disinvest non-strategic businesses and to decrease its debt, with the aim to establish a solid base for the next growth phase.