Fresh Del Monte Produce has signed an agreement to acquire certain assets and shareholdings that comprise Del Monte Foods Europe, including its operations in Europe, Africa and the Middle East. The acquisition, which is expected to close by the fourth quarter of 2004, will be made for approximately EUR 275 million ($340 million) in cash, primarily financed through the company's credit facility. The transaction is subject to receipt of regulatory approvals.

Fresh Del Monte's acquisition of Del Monte Foods Europe, a vertically integrated producer and distributor of processed fruit and vegetables, juices, snacks and desserts, will add approximately $370 million of sales and an array of products and brands to Fresh Del Monte's existing portfolio of fresh and fresh-cut produce. In addition, the acquisition strengthens the company's presence in Europe and other key markets. Del Monte Foods Europe's beverages and deciduous fruit are processed at facilities in England, Greece, South Africa and Italy, while its pineapple is cultivated and processed at its plantations and canneries in Kenya and Thailand.

Del Monte Foods Europe holds a perpetual, royalty-free license 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. As a result, the acquisition provides Fresh Del Monte with a myriad of new markets where the company will be able to sell fresh produce and processed foods under the Del Monte name, one of Western Europe's leading brands of processed fruit and pineapple.

In addition to strengthening the company's geographic presence, expanding its product line and consolidating the Del Monte brand in Europe, the Middle East and Africa, the acquisition also provides Fresh Del Monte with several other key strategic benefits, including:

-- A stronger platform for growth. Among retail and foodservice customers, the company will have an enhanced presence with greater distribution capabilities and will be able to take advantage of increased cross-promotion opportunities. Fresh Del Monte expects to increase marketing support for the Del Monte brand to drive an increase in sales. The company also expects to expand its presence in currently under-penetrated markets such as Russia.

-- Access to new product opportunities. The company's acquisition of the Del Monte brand for processed foods in Europe, the Middle East and Africa will provide Fresh Del Monte with access to new product opportunities, particularly in the areas of innovation and product pipeline expansion.

-- Significant cost and selling synergies. The transaction is expected to generate synergies that will result in meaningful cost savings. These synergies will come from combining operations, leveraging administrative efficiencies, implementing supply-chain enhancements and better utilizing the current selling, marketing and distribution networks of the combined companies.

-- Enhanced financial strength. The transaction is expected to help reduce Fresh Del Monte's earnings volatility, thus providing a solid foundation to accelerate growth and increase shareholder value. For fiscal year 2005, Fresh Del Monte expects the acquisition to be modestly accretive to earnings per share, as additional marketing investments will likely offset a significant portion of the expected savings for the year.

In commenting on the acquisition, Mohammad Abu-Ghazaleh, chairman and chief executive officer of Fresh Del Monte said, "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. 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."

"We are well positioned to unleash the substantial potential of these two businesses," added Abu-Ghazaleh. "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 energize these operations and drive strong profitability in the future."

"From a financial point of view, this is a very exciting transaction. While we will be able to increase our future bottom-line performance, our pro forma leverage will approximate a modest 25%, and we expect to pay off the transaction debt quickly," said Abu-Ghazaleh. "This is consistent with our strategy of making sound strategic investments while deploying our capital in a prudent manner. Given our strong balance sheet, we also have ample flexibility to make additional acquisitions should we decide to do so in the future."