Chr. Hansen to acquire Valio’s LGG business for €73m

Denmark-based natural ingredient producer Chr. Hansen has signed an agreement to acquire Valio’s Lactobacillus rhamnosus GG (LGG) business for €73m.

The deal will be funded through Chr. Hansen’s own cash position and existing credit facilities.

Chr. Hansen owns BB-12 probiotic strain and the acquisition will further strengthen its probiotics offering.

Chr. Hansen Holding CEO Cees de Jong said: “One of the ambitions in our Nature’s No.1 strategy is to expand our current business within microbial solutions for human health.

“The LGG strain and our own probiotic strain BB-12 are the best documented probiotic strains in the world and the acquisition allows us to capture the full potential of the LGG brand across markets for dietary supplements and infant formula offerings, as well as pursuing new opportunities in dairy.”

Since 1990, LGG has been used in food and dietary supplements and has proven beneficial effect on the gastrointestinal and immune system.

Chr. Hansen senior vice-president human health Lasse Nagell said: “The markets for well-documented probiotic strains are experiencing very strong growth in dietary supplements and drives an entire category in fermented milk products.

“We believe that there are vast opportunities for the LGG brand considering Chr. Hansen’s wide geographic reach and deep technical knowledge.”

Besides acquiring the full rights to the strain, Chr. Hansen also takes over a number of specialty strains already in production and a bacterial strain collection of around 3,200 strains.

Valio OY CEO Annikka Hurme said: “An important element in the deal is closer co-operation between the two companies’ world-leading innovations teams, which will further strengthen the impressive science backing LGG.”

The acquisition is subject to customary closing conditions, and is expected to close by the end of this year.

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Image: Chr. Hansen’s acquires Valio’s LGG probiotic strain. Photo: courtesy of Chr. Hansen.