18 April 2005 00:01 [Source: ICB Americas]
Following through on its strategic goals, DSM last week signed a deal to sell its bakery ingredients business to Glide Investment Management for €197.5 million ($253 million). The transaction, which will take the form of a share deal, is expected to close in the third quarter.
The transaction includes all activities of the bakery ingredients business group and the group’s stake in Rymco, a joint venture in South Africa. DSM will retain the bakery enzymes unit, which the company previously stated would remain a core product because of good growth potential. The food enzymes market is expected to grow at a healthy 3.1 percent, according to Business Communications Company Inc.
DSM’s bakery ingredients operation has been on the block since early in the 2004 third quarter, when the company de-cided to sell the business owing to limited growth prospects, particularly in the yeast sector. “The business characteristics of the markets in which DSM Bakery Ingredients operates are changing in terms of market growth potential and competitive intensity,” says DSM.
Over the years, DSM has been focusing its food ingredients strategy to include products that provide other functionalities—such as health enhancement and increased nutritional value—besides those provided by the bakery ingredients unit. The company established DSM Nutritional Products in 2003 with the acquisition of Roche’s vitamins and fine chemicals operation and is developing new products through the DSM Food Specialties unit.
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