• Should Yi-Lung Agricultural Co., Ltd Acquire Dole Taiwan?

Abstract

Dole is the largest multinational enterprise in the production and sales of fruits and vegetables in the world. Dole established a Taiwan branch in 2005 (Dole-Taiwan) and set up banana cutting and packaging plants in Beitou, Taipei and Wanluan, Pingtung in 2006. Dole-Taiwan cooperated with 7-11 and successfully launched the single banana sales business. In 2014, Yi-Lung Agricultural Co., Ltd (Yi-Lung) was established by Yu Chihjung, a banana farmer from Nanzhou Township, Pingtung County. By means of cooperation with Dole-Taiwan, Yi-Lung became a major supplier to 7-11 and Costco. At the beginning of 2020, Dole-Taiwan, which has been operating at a loss for some considerable time, announced its withdrawal plan from the Taiwan market. Yi-Lung was asked to acquire Dole-Taiwan, but Yi-Lung refuses to acquire Dole-Taiwan, it may lose their orders from 7-11 and Costco. However, this acquisition may lack economies of scale and scope for Yi-Lung, while operational integration is another problem. The key question is: Should Yi-Lung acquire Dole-Taiwan?

Keywords: Acquisition, vertical integration, banana industry, Dole, Yi-Lung