DSM to acquire Cargill’s cultures and enzymes business

Dutch food and chemicals company DSM has entered into an agreement to acquire Cargill’s cultures and enzymes business for €85m in cash, as part of its plan to strengthen its global dairy business.

The move comes after DSM and Cargill confirmed on 20 September 2012 that they were in exclusive talks over the deal.

Cargill’s cultures and enzymes business manufactures cultures and enzymes for the dairy and meat industries, and has annual net sales of around €45m.

The business has a portfolio of new products built on technologies such as culture texture toolbox; fast acidification for cheese yield improvements; and culture flavour systems.

It has production plants in Wisconsin, US, and La Ferté-Sous-Jouarre, France, and employs around 200 people.

The proposed sale is part of Cargill’s strategy to focus on product lines which are close to its core operations.

DSM managing board member Stephan Tanda said the proposed acquisition complements the company’s Food Specialties business.

According to DSM, the global market for cultures and enzymes is valued at over €1bn, with an annual growth rate of more than 5%, and its applications are primarily in the dairy industry.

The company noted that the acquisition would boost sales and complement its manufacturing footprint, customer reach and innovation capabilities in biotechnology and SG&A.

It will also strengthen DSM’s global position in dairy ingredients, with enzymes, PUFAs, vitamins, cultures, probiotics, bio actives, preservation systems and tests.

The deal will be DSM’s eighth acquisition since it announced its growth strategy in 2010, which is aimed at boosting its nutrition business.

The acquisition is expected to be completed over the next few months.

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Image: DSM expects the acquisition of Cargill’s cultures and enzymes business to boost its manufacturing footprint, customer reach and innovation capabilities. Photo courtesy of DSM.