Dutch DSM and Swiss Firmenich join forces in cash and shares deal (updated)
31/05/2022 06:54
(Adds more detail and background)
AMSTERDAM, May 31 (Reuters) - Dutch specialty chemicals
maker DSM DSMN.AS on Tuesday said it would merge with Swiss
peer Firmenich in a deal involving shares and cash, to become a
leading supplier of food ingredients and beauty and well-being
products.
The companies said the merger, expected to be finalised in
the first half of next year, could lead to an organic sales
growth of 5% to 7% per year and annual cost savings of 350
million euros ($376.15 million).
DSM shareholders would own 65.5% of the new Dutch-Swiss
group, while current owners of Firmenich will own the rest of
the shares and will receive 3.5 billion euros ($3.76 billion) in
cash.
DSM said last September that it would sell its materials
division to focus purely on producing sustainable food and
health products. urn:newsml:reuters.com:*:nL1N2QG0BK
The deal with Firmenich valued DSM at 21.6 billion euros
adjusted for the Materials business, the company said.
Sales of its nutrition division, which produces goods
ranging from vitamins and other supplements to baby formula and
animal feed, rose 10% to 7 billion euros last year. DSM's total
sales were 9.2 billion euros in 2021.
Firmenich reported sales of 4.5 billion Swiss franc ($4.7
billion) last year. Both companies realised an adjusted core
profit margin (EBITDA) of around 20%.
The new company will be based in Switzerland, with
headquarters in Kaiseraugst and Maastricht, in the south of the
Netherlands. Shares will remain listed on Euronext Amsterdam.
The merger will be effected through a public offer of DSM
shares, in which current DSM shareholders can exchange their
share for a share in the new company.
DSM last month said it had agreed to sell its protective
materials business, part of the materials division for sale, to
Avient Corp AVNT.N for $1.48 billion. urn:newsml:reuters.com:*:nL3N2WI13D
($1 = 0.9305 euros)
($1 = 0.9303 euros)
(Reporting by Bart Meijer and Toby Sterling; Editing by Kim
Coghill)
((Bart.Meijer@thomsonreuters.com; +31 20 504 5006; Reuters
Messaging: bart.meijer@thomsonreuters.com))