March 5, 2012

DSM eyes mergers and acquisitions in 2012

DSM said Wednesday (Feb 29) it is on the lookout for suitable acquisitions in profitable nutrition and life sciences businesses in 2012, despite a gloomy forecast for the year.

The Dutch food and chemicals group which has a war chest of more than EUR2 billion (US$2.64 billion) has transformed its business over the past couple of years, selling off its lower-margin bulk chemicals businesses to concentrate on less cyclical food ingredients and high end plastics.

It bought US baby food ingredients maker, Martek for US$1.1 billion in February 2011, and moved into the biofuels market earlier this year announcing a 50-50 joint venture with private US ethanol maker POET, one of the biggest ethanol producers in the world.

The joint venture will produce ethanol on a commercial scale from corn crop residue such as husks and stalks.

Earlier on Wednesday, DSM reported fourth-quarter earnings before interest and tax (EBIT) of EUR166 million (US$219.2 million), down 2% on sales of EUR2.23 billion (US$2.95 billion), up 7%.

An analysts poll commissioned by Reuters forecast fourth-quarter EBIT of EUR173 million (US$228.45 million) on sales of EUR2.22 billion (US$2.93billion).

"We are conscious that risks to the macroeconomic global outlook remain, and that weakness in Europe and some of our end-markets, especially building and construction, persists," chief executive Feike Sijbesma said. He said the company was well-placed to achieve its 2013 targets.