World’s largest olive oil company plummets 20% after rivals agree to takeover deal

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 said in a separate statement that it has accepted the offer, which implies an enterprise value of 520 million euros ($583.2 million ).

“This milestone marks the start of a new phase, built on solid foundations and with a long-term vision to continue creating value for the sector and all our stakeholders,” said Deoleo CEO Cristóbal Valdés.

Deoleo was last trading down 19.9%. 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.