Spanish food group Ebro Puleva has agreed to buy US rice producer Riviana Foods for US$380m.

Riviana earlier this year reported lower quarterly earnings and admitted it was struggling with the impact of low-carb diets as demand for its starch-based products had eased off.

Ebro Puleva will make an all-cash tender offer for all the outstanding shares of Riviana common stock for $25.75 per share, in a deal worth approximately $380m

The transaction has been unanimously approved by the boards of directors of Ebro Puleva and Riviana Foods, Ebro Puleva said in a news release, adding that the acquisition is subject to regulatory approvals, as well as other customary closing conditions. It is expected to close in the fourth quarter of 2004.

"Riviana is a market leader in the US with a strong portfolio of brands, and represents an excellent fit with Ebro Puleva from a strategic point of view. The transaction provides us penetration in the US market and improves our balance between domestic and international business, giving us worldwide leadership in rice. We believe the transaction will be EPS accretive in fiscal year 2004 and that excellent opportunities exist to share best practices and product innovation. We also believe the transaction with Riviana furthers our expansion strategy while creating significant value for our shareholders," said Antonio Hernandez Callejas, vice chairman and CEO of Ebro Puleva.