Del Monte (Photo: Getty Images)
SAN FRANCISCO (AP) - Del Monte Foods is selling off its fruit and vegetable business to focus instead on tasty vittles for pets.
The San Francisco-based company said Friday that it is selling its consumer products business, which includes canned Del Monte pineapple and Contadina tomatoes, to Del Monte Pacific in Asia for $1.68 billion.
It will then begin catering solely to the tastes of furrier consumers through its pets business, which includes brands such as Pup-Peroni, Meow Mix and Milk-Bones.
Del Monte Pacific, which is publicly traded in Singapore and the Philippines, said the deal will add about $1.8 billion to its annual sales and $178 million to operating earnings. The Asia-based company already owns one of the world's largest pineapple plantations and said it would benefit from owning brands that have significant market share in canned fruit, vegetables and broth in the U.S.
Del Monte Foods said that it will change its name once the deal is complete, which is expected in early 2014.
The privately held company said that it expects the pet products market will grow as consumers increasingly consider pets as part of their family and increase their spending on premium pet food. It recently added to this part of its business with the $341.4 million acquisition of specialty brand Natural Balance in July.
The deal also helps Del Monte Foods exit the fruit and vegetable business, which is can be volatile as weather, labor and other issues can dramatically impact its supplies and performance.