September 21, 2012

DSM explores acquisition of Cargill's cultures and enzymes business

Press release

Royal DSM, the global life sciences and materials sciences company, is in exclusive discussions with Cargill which may result in the acquisition of Cargill's cultures and enzymes business by DSM.

The cultures and enzymes business of Cargill is a global leading manufacturer of cultures and enzymes for the dairy and meat industries with manufacturing operations in Wisconsin (USA) and France. It has a strong pipeline of new products built on three pillars of technology: culture texture toolbox, fast acidification for cheese yield improvements and culture flavor systems. The business generates net sales of about €45 million (US$58.37 million) per year with approximately 200 employees.

The global market for cultures and enzymes is valued at over €1 billion (US$1.30 billion), growing steadily at more than 5% per annum. A possible combination of the Cargill cultures and enzymes business with the dairy business of DSM Food Specialties would enable DSM to propel sales growth as well as capture sizable synergies in global manufacturing footprint, customer reach as well as innovation capabilities in biotechnology and SG&A (selling, general and administrative expense).

A successful acquisition of the Cultures and Enzymes business of Cargill would be the eighth acquisition in the Nutrition cluster since DSM announced its corporate strategy DSM in motion: driving focused growth in September 2010.

Hans-Christian Ambjerg, president of DSM Food Specialties, commented, "This acquisition would be another great step in achieving our ambitious growth strategy. Combining both businesses would allow us to serve our customers faster with one of the most versatile offerings in Cultures and Enzymes in the global dairy industry. We have great respect for the knowledge and expertise of the people at Cargill."

According to Cargill, this proposed sale is in line with its strategy to re-focus its texturising business and concentrate on product lines that are adjacent to the company's core activities and where it can be a leading or relevant player in the marketplace.

Both companies are now engaging in the information and consultation process with employee representative bodies in the relevant countries.