Del Monte to sell StarKist tuna to Korean firm

Adding to the already strong international flavor to the tuna offerings in the grocery store. San Francisco-based Del Monte Foods Co. has agreed to sell its seafood business to a South Korean firm.

The sale of the Charlie the Tuna line for $363 million to Dongwon Enterprise Co. will mark the third popular brand of tuna owned by overseas companies.

Thai Union International has been sole owner of Chicken of the Sea since 2000, while Bumble Bee is part of the holdings of Toronto-based Connor Bros. Income Fund.

Del Monte struggled to make the tuna business produce more growth and profits, as Americans chased low prices for their tuna salads. A rise in fish and other commodity prices in recent months increased the pressure.

An executive with Dongwon Enterprise said the acquisition could help it establish a strong foothold in the U.S. market.

In the most recent fiscal year, Del Monte's seafood business generated about $560 million in net sales. The sale will include Del Monte's manufacturing operations in American Samoa and Ecuador, and certain assets in California and Ecuador.

The sale is expected to net after-tax cash proceeds of about $300 million, to be used to pay down debt.

Although the deal is expected to trim the company's annual earnings per share slightly in the current fiscal year, the impact should be neutral the following year.

(E-mail Teresa F. Lindeman at tlindeman(at)post-gazette.com)

(Distributed by Scripps Howard News Service, www.scrippsnews.com.)