Dole Food Co. has signed a letter of intent to buy a 60% stake in Swedish produce marketer Saba Trading AB for about $90 million.
Saba, a fruit, vegetable and flower importer and distributor, has a 40% market share in Sweden and $500 million in annual revenue. Dole, based in Westlake Village, plans to purchase its stake from Axel Johnson AB and the Swedish Cooperative Society, which will retain minority stakes.
The purchase could give Dole a leg up in some markets over competitor Chiquita Brands International, a current supplier to Saba.
The new agreement may put Dole in a better position to supply Saba with its own produce, analysts said.
Dole already has established itself in the European market by acquiring Spain's Pascual Hermanos, a citrus and vegetable producer and exporter to Europe, and entering into a joint venture with Norwegian fruit and vegetable producer Bama Group to distribute packaged salads to the Norwegian market.
The Saba Trading agreement would expand Dole's presence in Sweden and could help it market salads there that were produced at the Bama facility.
The agreement is consistent with Dole's strategy of controlling its own production and marketing channels, setting it apart from its main U.S. competitors, Chiquita of Cincinnati and Del Monte Food Co. of San Francisco.