South Korean food group Dongwon said on Tuesday that it will buy canned tuna company StarKist from Del Monte Foods Co (DLM.N: Quote, Profile, Research) for about $300 million, in the latest push by South Korean food makers for global expansion.
Del Monte, whose brands include College Inn broths and Meow Mix pet food, was exploring a possible sale of StarKist as the unit, acquired by Del Monte in 2002, has weighed on its profits in recent quarters as the cost of skipjack tuna soared.
“The acquisition price will slightly top $300 million,†a Dongwon spokesman said by telephone.
The South Korean company will hold a news conference on Thursday about the acquisition, he added, declining to give further details.
Dongwon Group is the country’s best-known brand for processed fishery food, with one of its units -- Dongwon F&B Co Ltd (049770.KS: Quote, Profile, Research) -- taking up about 75 percent of South Korea’s canned tuna market.
It is not known yet which units of the Dongwon Group will participate in the takeover deal and how they finance it.
Last Friday, the Maeil Business Newspaper reported that several Dongwon units, including Dongwon F&B and fishery unit Dongwon Industries Co Ltd (006040.KS: Quote, Profile, Research) will buy 100 percent of StarKist, including debt.
Shares in Dongwon F&B gained 0.5 percent to 44,000 won by 0301 GMT, outperforming the wider market’s 0.6 percent fall. In contrast, Dongwon Industries shed 1.8 percent to 134,500 won.
Dongwon was the second-biggest player in the Asia Pacific canned food market in 2006, trailing Japan’s Hagoromo Foods Corp (2831.T: Quote, Profile, Research), but ahead of Del Monte, according to Research and Markets.
Both Dongwon and Del Monte are listed in the Atuna Stock Index – click here to go to the Stock Index