DSM to buy Roche division
DSM announced today that is to pay CHF 3.5 billion (€2.4 billion)
for Roche's vitamins and fine chemicals division.
When Roche launched the sale of the division several months ago
DSM was quickly suggested in the press as a likely buyer. For DSM
the move is an important step in its Vision 2005 strategy.
Ending months of speculation Dutch life science products company DSM announced today that is to pay CHF 3.5 billion (€2.4 billion) for Roche's vitamins and fine chemicals division.
When Roche launched the sale of the division several months ago DSM was quickly suggested in the press as a likely buyer.
Roche has been looking into a number of options for its vitamins business - although a sale has always been the most likely outcome - after a series of poor performances at the division and the impact of the fine imposed by the EU for its part in a price fixing cartel.
On the basis of discussions to date, DSM and Roche have reached a basic agreement on price and payment terms and expect to soon conclude a contract on all terms of the transaction.
The Roche division is a leading supplier of vitamins and carotenoids with annual sales in 2001 of CHF 3.5 billion (€2.4 billion). The division, which will become a unit of DSM, is a global business, headquartered in Kaiseraugst (Switzerland). It employs 7.500 people.
The total consideration, subject to regulatory approval, of the transaction is €2.25 billion with present and future liabilities from the vitamin price fixing case lying still with Roche.
Franz B. Humer, chairman and CEO of Roche said: "This is a significant step for Roche to further focus our group on our two high-tech pillars, pharmaceuticals and diagnostics.
With the acquisition of Boehringer Mannheim, the spin-off of Givaudan, the acquisition of a majority interest in Chugai and a number of supplementary acquisitions and alliances in addition to the strengthening of our existing business we have clearly positioned Roche as a leading, innovation driven healthcare company."
Humer continued: "We are glad that we have reached an agreement with DSM, which as the new owner of the vitamins and fine chemicals division fulfills all the requirements we defined when we embarked on this project. The division's product range for the animal feed, food, pharmaceuticals and cosmetics industries supplements the core business of DSM."
In a statement on Tuesday DSM confirmed that the acquisition is an important step in the realisation of the company's Vision 2005 strategy, its aim to increase sales to €10 billion by 2005, that DSM presented in 2000 and which involves a concentration on life science products and performance materials.
Peter Elverding, DSM's managing board chairman commented: "The combination of DSM's life science products and Roche's V&FC will be the world's leading supplier to the life science industry. It will have a unique and coherent portfolio of businesses serving our customers in human nutrition (food), animal nutrition (feed) and health (pharma). We see opportunities to achieve significant benefits for Roche's and DSM's businesses in these areas."
Elverding added: "the combination of DSM's and V&FC's leading (bio)technologies will allow an acceleration of innovation, for instance in nutritional ingredients and functional foods. We are very pleased to be able to announce this acquisition just a few months after we have finalised the divestment of our petrochemical activities, the other side of our Vision 2005 strategy."
Roche vitamins and fine chemicals division researches, produces, markets and supplies vitamins, carotenoids, citric acid and other active ingredients as well as other additives for animal feed, food, pharmaceutical and cosmetics industry. In the first half of 2002 Roche V&FC achieved sales of € 1,180 million (CHF 1,747 million), an EBITDA of €173 million (CHF 256 million) and an operating profit of €95 million (CHF 140 million). In 2001 the DSM group had annual sales of €8 billion and employed about 20,000 people.
