US fruit and vegetable company Fresh Del Monte Produce has announced that it has signed an agreement to acquire Del Monte Foods Europe for US$340m in cash from insolvent Italian food company Cirio.

The acquisition includes Del Monte Foods Europe’s operations in Europe, Africa and the Middle East. The acquisition is expected to close by the fourth quarter of 2004.

Fresh Del Monte said its acquisition of Del Monte Foods Europe will add approximately $370m of sales and a number of new products and brands to Fresh Del Monte’s existing portfolio of fresh and fresh-cut produce. In addition, the company said the acquisition strengthens its presence in Europe and other key markets.

As part of the deal Fresh Del Monte will also acquire the licence to use the Del Monte brand for processed and/or canned food products in more than 100 countries throughout Western, Central and Eastern Europe, Africa, and the Middle East.

“Our acquisition of Del Monte Foods Europe represents a unique opportunity for us to leverage the tremendous potential of the Del Monte brand across a wide range of high-growth markets, including Eastern Europe and Russia,” said Fresh Del Monte’s CEO, Mohammad Abu-Ghazaleh.

“Bringing Fresh Del Monte and Del Monte Foods Europe together creates a wealth of exciting growth prospects for us, as well as important cost, selling, and marketing synergies. It is also consistent with our sharp focus on diversifying our business across products and geographies to increase revenues and reduce earnings volatility in our business,” Abu-Ghazaleh continued.

“While many of the assets that we will acquire have not been operating at full capacity, we are confident that we will be able to energise these operations and drive strong profitability in the future,” he added.