Prepared Foods September 19, 2005 eNewsletter
Degussa AG of Dusseldorf, Germany, has agreed to sell its food ingredients operations to Cargill of Minneapolis for 540 million euros ($670 million). The transaction is still contingent on the approval of the Degussa Supervisory Board and the relevant regulatory authorities.
Degussa Management Board chairman Utz-Hellmuth Felcht stated, "Food Ingredients are a strategically ideal fit for a strong global food industry player such as Cargill. We feel that we have placed these operations in good hands and are very satisfied with the transaction as a whole."
In a consolidating food ingredients industry, the Degussa Management Board decided in August 2004 to divest its Food Ingredient business in order to provide it with the opportunity for a further development into a leading global position.
"This agreement marks a very significant step in Cargill's strategy of becoming a leading provider of specialty ingredients and ingredient systems to food and beverage companies globally," said Warren Staley, Cargill chairman and chief executive officer. "This will be our largest acquisition since Cerestar in 2002 and greatly strengthens our range of texturant systems and flavoring capabilities. It supports our strategy of becoming the recognized global leader in providing food and beverage companies with innovative solutions that help them succeed."
After selling the Fruit Systems activities in early 2005, the Degussa Food Ingredients Business Unit consists of the Texturant Systems and Flavors Business Lines. Texturant Systems is comprised of product groups in the areas of hydrocolloids, blends, lecithin, cultures and bioactive ingredients. The Flavors Business Line produces flavoring solutions for the beverage, dairy, confectionary and other food sectors and provides key capabilities in formulation, application, analytical chemistry and sensory analysis. The expertise of Degussa's Food Ingredients employees will complement and strengthen that of the existing Cargill organization.