Degussa sells food ingredients unit to Cargill

Author: Neil Sinclair


Cargill adds Degussa food ingredientsLONDON (ICIS news)--Degussa has agreed to sell its food ingredients business to US food and agriculture group Cargill for Euro540m ($670m), the German specialty chemicals company said on Friday.

The approximately Euro440m turnover unit, which employs 2,088 people and has been up for sale since August 2004, consists of texturant systems and flavours business lines. Most of the workforce are employed at the unit's 15 production sites in the US and France.

Texturant systems produces hydrocolloids, blends, lecithin, cultures and bioactive ingredients. The flavours business produces flavourings for the beverage, dairy, confectionary and other food sectors. It also provides formulation, application, analytical chemistry and sensory analysis.

Degussa chairman Utz-Hellmuth Felcht said the food ingredients unit was "a strategically ideal fit for a strong global food industry player such as Cargill".

Cargill chairman and chief executive Warren Staley said the acquisition was its biggest since Cerestar in 2002 and marked a very significant step in the company's strategy of becoming a leading provider of specialty ingredients and ingredient systems to food and beverage companies globally.

The deal with Cargill, which is subject to regulatory approval, comes some six months after Degussa agreed to sell its fruit systems activities to US private equity company Speyside for an undisclosed sum.

Cargill beat off a challenge from Israeli flavours and fragrances company Frutarom to the Degussa food ingredients business.