DSM in talks to acquire Cargill’s cultures and enzymes business

Dutch food and chemicals company DSM is in exclusive talks with Cargill over the acquisition of the US agribusiness company’s global cultures and enzymes business.

Both companies noted that the talks may or may not result in a definitive agreement.

The cultures and enzymes business, part of Cargill’s global texturising 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.

Cargill said that the proposed divestment is part of its plan to focus on product lines which are close to its core operations.

DSM Food Specialties president Hans-Christian Ambjerg said the acquisition would help the company to achieve its growth strategy.

"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," Ambjerg added.

According to DSM, the global market for cultures and enzymes is valued at over €1bn, and has an annual growth rate of more than 5%.

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

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

Upon acquisition, Cargill’s cultures and enzymes business would become part of DSM’s dairy business.

Currently, both companies are involved in a consultation process with employee representative bodies in the relevant countries to seek their feedback.

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