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Total's Dutch deal gets approval

TOTAL Produce has completed a deal to buy half of a Dutch fruit and vegetable company.

The company agreed a deal to buy a 50pc share of Frankort & Koning in December, but it has now been approved by the various regulatory bodies.

Under the terms of the purchase, Total will pay an initial €6m, with additional consideration payable over the next number of years assuming that certain profit targets are met.

Assuming all targets are hit, Total will ultimately pay €15m.

Frankort & Koning recorded a turnover of €296m in the year ended December 2010 and generated an average profit after tax over the past three financial years of €2.7m.

Davy Stockbrokers' Aiden O'Donnell says it will "deepen Total's position in the European fruit market, where it is one of the largest, if not the largest, fresh produce concern".

"The deal adds almost €150m of turnover and it is likely that there will be some potential for synergies.

"Overall, this looks like a smart deal and we reaffirm our 'outperform' rating," he added.

Total closed down 2.05pc at 47c. The stock has gained more than 23pc so far this year.

Irish Independent