A dramatic 'global foods' makeover.
According to Maybank Kim Eng, Del Monte Pacific (DMPL) announced a massive agreement to buy Del Monte Foods’ consumer business in a deal worth USD1.675b.
Here's more from Maybank:
This will change the profile of DMPL dramatically into a global foods company. Reiterate BUY with higher TP. We see a good fit between the two entities as they operate in different geographies.
Synergies would likely come in the form of brand ownership and cost savings in certain products.
We acknowledge execution risk, given the high leverage taken, but the stable business nature mitigates risk while still providing significant upside for shareholders. Our new TP of SGD1.30 (PHP45.00) takes into account a longer-term view.
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