March 30, 2006

EU clears Cargill to buy Degussa's food ingredients unit

The European Commission Wednesday (Mar 29) cleared US farm products group Cargill to buy the food ingredients business of Germany's Degussa.

The regulator last December launched an in-depth investigation into the deal, fearing the combined companies could dominate the market for lecithin, a soybean-based emulsifier used in chocolate and bakery products. The investigation showed the companies' position in the lecithin market was not as strong as initially thought, however.

Cargill is paying Degussa EUR540 million for the business unit, which supplies everything from flavourings to textures to the food industry. The unit had EUR441 million of sales in 2004, making up roughly 4 percent of Degussa's total EUR11.2 billion sales that year.

Minnesota-based Cargill had sales of EUR71.1 billion in 2005.