Here's How DSM Aspires To Become Leading Player In Food and Health Products Market

Here's How DSM Aspires To Become Leading Player In Food and Health Products Market
  • Netherlands-based Dutch specialty chemicals maker DSM forged deals to scoop Swiss flavor and fragrance maker Firmenich to become a leading player in the budding food ingredients and health products markets.
  • As previously planned, DSM also looks to sell its engineering plastics division signaling its exit from the industrial materials market, Reuters reports.
  • DSM shareholders will get a 65.5% stake in a new group called DSM-Firmenich. The unlisted Firmenich owners will receive a 34.5% stake of the combined entity plus €3.5 billion in cash from DSM.
  • DSM also agreed to sell its engineering plastics division to German peer Lanxess Ag LNXSY and private-equity firm Advent for €3.85 billion ($4.14 billion), including debt.
  • DSM and Firmenich said the merged group, likely to be formed in the first half of 2023, could see organic annual sales growth of 5% - 7% while realizing yearly cost savings of €350 million. 
  • The new company will have dual headquarters in Kaiseraugst near Basel, Switzerland, and in the Dutch city of Maastricht. 
  • The company's legal domicile will be in Switzerland, but the shares will trade on the Euronext Amsterdam exchange.
  • DSM's nutrition division's sales rose 10% to €7 billion in 2021. DSM's total sales were €9.2 billion in 2021.
  • Firmenich reported sales of 4.5 billion Swiss francs ($4.7 billion) in 2021. 
  • DSM and Firmenich realized an adjusted core profit margin (EBITDA) of 20%.
  • DSM previously agreed to sell its protective materials business, part of the materials division for sale, to Avient Corp AVNT for $1.48 billion, as per Reuters.

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