April 6, 2010

 

DSM sells agro and melamine operations

 
 

Royal DSM NV will sell its non-core agro and melamine activities to Egypt's Orascom Construction Industries in a EUR310 million (US$418 million) deal that will help raise cash for acquisitions.

 

"The divestment of the melamine and polymer activities allows us to transform our portfolio of activities and focus on life and materials sciences," DSM Chief Financial Officer Rolf-Dieter Schwalb said.

 

Credit Suisse said the move brings the company closer to achieving its goals of disposing of the base and chemicals businesses before the end of 2010, which should boost management credibility while it believes the company will soon be looking to push ahead with an acquisition.

 

DSM in 2007 said it would focus on its nutrition and pharma divisions and its performance materials activities while divesting non-core elastomers, agro and melamine activities. Schwalb reiterated DSM still aims to sell its remaining non-core activities, including elastomers, citric acid and DSM special products, by the end of 2010.

 

DSM has said in the past it wanted to wait until it had divested its non-core activities before it embarked on acquisitions. Schwalb said any acquisitions most likely will be in the area of nutrition or performance materials, used to make plastics and fibers, among other things.

 

OCI, Egypt's largest builder by market value, said the acquisition fits its strategy of becoming a world leader in the area of fertilisers.

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