October 21, 2003
DSM's Acquisition of Roche Vitamins & Fine Chemicals - Recognition of Huge Potential for Animal Feed Enzymes
After a long process, which started as early as in the first half of 2002, DSM (Dutch State Mines) managed to won the acquisition of Roche Vitamins & Fine Chemicals (V&FC), with effect from October 1 2003.
This was definitely not an easy process to begin with.
Initially, the European Commission said more time was needed to access the viability of this acquisition, as they were worried the combination of both alliances might result in near-monopolistic market conditions of phytase, an ingredient to enhance animal nutrition, and of the feed enzymes business.
At that time, DSM is in partnership with BASF concentrating on the development of feed enzymes business; whilst Roche formed strategic alliance with Novozymes, started in 2001, and has since then enjoyed good profitability through continued strive in innovation of animal feed enzymes. DSM recognizes Roche's immense potential in this field, which sparks DSM's interest in initiating an acquisition.
The European Commission cleared the acquisition on July 23. Federal Trade Commission, another authority monitoring industry competitive activity, too granted approval on September 23. However, on the condition that DSM terminates their feed enzymes alliance with BASF, so as to ensure fair competition in this market segment.
On the very same day, DSM and BASF announced the end of their alliance. Taking into account of the need for a smooth transition period favourable to both companies, DSM will continue to supply BASF with feed enzymes till BASF is capable of producing its own. In addition, DSM will impart vital technology skills to assist in their production.
The official date of closing transaction between DSM and Roche was on September 30, which was held in Switzerland.
Following the closing of the acquisition, Roche's Vitamins & Fine Chemical is renamed into DNP (DSM Nutritional Products). DSM's competencies lie in biotechnology enhancements and operational excellence; whilst DNP will focus in application, formulation of technology, and responsible for marketing its products to the global audience. By specialising in their respective fields, it allows DSM and DNP to work towards their goal of rising to "profitable leadership position", in line with DSM's planned strategy Vision 2005.
DSM will render support to DNP to become the globally leading nutritional products company and will also, in combination with DSM's Life Science Products cluster, form the world-leading supplier of services, products and ingredients to the life science industry. DSM continues to recognize feed enzymes as a promising area with vast
potential, hence the Roche-Novozymes alliance would continue.