Cargill and DSM have entered exclusive discussions that may result in the acquisition of Cargill’s cultures and enzymes business by DSM, the firms have confirmed.
The talks may or may not result in Royal DSM purchasing the cultures and enzymes business that currently generates Cargill around €45 million per year.
If the Cargill business buy-out is successful, it will be the eighth acquisition in the nutrition arena for DSM since September 2010 when the firm announced its corporate strategy ‘DSM in motion: driving focused growth’ – outlining a shift towards maximizing sustainable growth and profits.
“This acquisition would be another great step in achieving our ambitious growth strategy,” said Hans-Christian Ambjerg, president DSM Food Specialties. “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.”
Cargill said the proposed sale is in line with its strategy to re-focus businesses and concentrate on product lines that are adjacent to the company’s core activities where it can be a leading or relevant player in the marketplace.
The global market for cultures and enzymes is valued at over €1 billion, and is said to be growing steadily – at more than 5% per annum.
Currently Cargill’s cultures and enzymes operation forms part of its global texturizing business, and has production facilities in Wisconsin (USA) and La Ferté-Sous-Jouarre (France). The business unit manufactures cultures and enzymes for the dairy and meat industries and employs around 200 people.
The Cargill business is known for its strong pipeline of new products built on three pillars of technology: culture texture toolbox, fast acidification for cheese yield improvements and culture flavour systems.
DSM suggested a possible combination of Cargill’s cultures and enzymes business with its own dairy business ‘would be highly complementary’ and would create a strong global player.
Both companies are now engaging in the information and consultation process with employee representative bodies in the relevant countries. DSM and Cargill say further information will be announced ‘in due course’ – if and when an agreement is signed.