September 2, 2003
Degussa Transfers Vitamin B3 Business in Belgium to Reilly
Degussa AG, Dusseldorf, and Reilly Industries, Inc., Indianapolis, make public a two-stage transaction to transfer Degussa's vitamin B3 business in Antwerp/Belgium to Reilly's wholly owned Belgian subsidiary, Reilly Antwerp N.V. The parties have signed all contracts necessary to complete both stages of the transaction and are waiting for final Belgian government approval to complete the purchase by Reilly. The purchase price will not be disclosed, by agreement. In 2002, Degussa generated sales in the double-digit millions Euros with this business.
Until approvals can be obtained, Degussa Antwerpen N.V., a wholly owned Degussa subsidiary, will toll manufacture all vitamin B3 products currently made at its Antwerp site exclusively for Reilly. Once the governmental approvals have been received, Reilly and Degussa AG will close the transaction to transfer the assets of the B3 business to Reilly Antwerp N.V. Reilly will be responsible for the business from the date the toll manufacturing begins on September 1st, 2003. Degussa will continue to sell vitamin B3 into the feed market as an agent for Reilly.
Upon completion of both transactions, Reilly will have all assets and know-how necessary for continuing and growing the business. Once this stage of the transaction closes, Reilly Antwerp N.V. will produce the vitamin B3 products at Antwerp with the same 34 experienced staff members currently employed at the facility.
The Degussa Management Board Chairman Prof. Utz-Hellmuth Felcht stated: "Divestment of the B3 business is a logical consequence of our strategic decision to focus our feed additives resources on amino acids for animal nutrition."
"This acquisition makes good business sense for several reasons," said Reilly Chief Executive Officer and President Robert D. McNeeley. "First, it advances Reilly's position as a major supplier of vitamin B3. With this acquisition we will have the world's largest capacity for food grade vitamin B3 and we will be the second largest producer of feed grade vitamin B3 as well. Second, as Reilly is the world's largest supplier of beta picoline, a key raw material for vitamin B3 production, this acquisition fits well with our growth strategy. Finally, it demonstrates Reilly's commitment to being a world-class supplier of vitamin B3 and its derivatives."
This transaction will have no direct impact on Reilly's Indianapolis operations since vitamin B3 production will remain in Antwerp. "In Indianapolis we currently produce raw materials for Degussa's vitamin B3 business," said Reilly Vice President Jacqueline Simmons. "It is our intention to continue to make those raw materials in Indianapolis and become a much stronger integrated supplier of vitamin B3."
Degussa is the only manufacturer to market all three of the important amino acids for animal nutrition DL-methionine, L-lysine (Biolys®) and L-threonine. These amino acids are produced at five sites in four countries. Degussa's Feed Additives Business Unit sells its products in 100 countries throughout the world and generated sales of € 568 million in fiscal 2002.
