Bottles of Spanish olive oil are displayed for sale at a Carrefour supermarket in Spain.
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Shares of Deoleo, the world’s largest olive oil company, plummeted Thursday after two rivals announced plans to acquire the company, a deal that would further consolidate Spain’s dominance in the sector.
Spanish olive oil firms Dcoop and Acesur will each hold a 50% stake in the company, resulting in a new olive oil giant in the region.
The deal is intended to boost olive oil consumption worldwide and support farmers in creating value through the supply chain, Dcoop said in an announcement.
Deoleo was last trading down 17.8%. However the stock is up around 55% since the beginning of the year as it’s benefited from a moderation in olive oil prices that has helped lift U.S. sales.
CNBC reached out to Deoleo for comment and is awaiting a response.
Deoleo shares since the beginning of the year.
The news comes after an intensifying takeover battle between Dcoop and multinational firms including those from Italy, France, and Australia. The stock gained over 20% on Aug. 19 when news of the takeover battle emerged. Dcoop reportedly previously offered 470 million euros ($545 million) for Deoleo.
Spain is one of the world’s leading olive oil producers and is often used as a global reference for prices.
Prices for the commodity have been volatile over the past few years as supplies swung dramatically one season to the next, with climate change, water scarcity, and pest and disease playing a role.
Deoleo CEO Cristóbal Valdés told CNBC in July that the period between 2022 and 2024 was one of the most challenging periods for the sector, but that prices are now stabilizing due to favourable rain trends.
“The highly complex market cycle experienced between 2022 and 2024, which had a severe yet temporary impact on the industry, is now definitively behind us,” Valdés said at the time.
