9 September 2005 - COBHAM, UK and MINNEAPOLIS, US - Degussa AG of Dusseldorf, Germany, has agreed to sell its food ingredients operations to Cargill of Minneapolis, Minn, USA for 540 million Euro ($670 million U.S.). The transaction is still contingent on the approval of the Degussa Supervisory Board and the relevant regulatory authorities.
Degussa Management Board Chairman Prof. Utz-Hellmuth Felcht states: "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, today 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.
Degussa
As the global market leader in specialty chemicals, Degussa uses its innovative products and system solutions to create something indispensable for its customers’ success. It’s an approach we sum up in our claim of “creating essentials”. In fiscal 2004 its 45,000 employees generated sales of 11.2 billion euros, and operating profits (EBIT) of 965 million euros.
Degussa’s Business Unit Food Ingredients
The Food Ingredients Business Unit of Degussa is the global food industry’s chosen partner to supply innovative texturizing, flavoring and bioactive solutions based on thorough applications know-how and superior service. Adjusted for the divestment of the Fruit Systems business, plus other individual activities still remaining with the Group, Food Ingredients generated sales of 441 million euros in fiscal 2004. Altogether, the Business Unit has 2,088 employees effective June 30, 2005, the majority of them in the USA and France. Approx. 200 people are employed in the German locations of Hamburg, Freising, Trostberg and Bönen.
Cargill
Cargill is an international provider of food, agricultural and risk management products and services. The company, which has 124,000 employees in 59 countries, generated sales of approx. $71 billion (U.S.) in fiscal 2004/05.