Royal DSM and Nutreco are collaborating to buy nutrition supplier Provimi. (Photo: Provimi/FIS)
Royal DSM, Nutreco plan to buy animal nutrition supplier
NETHERLANDS
Thursday, July 28, 2011, 04:00 (GMT + 9)
Global science-based company Royal DSM and Dutch animal nutrition and fish feed leader Nutreco NV (NUO) have confirmed that they are collaborating to jointly acquire animal nutrition supplier Provimi. Royal DSM and Nutreco are seeking to split up the asset that could be worth more than EUR 1.8 billion (USD 2.6 billion).
Amersfoort-based Nutreco and Heerlen-based DSM communicated this week that they may combine forces to purchase the asset from Permira Advisers LLP if the opportunity arises.
The announcement comes after speculation that began in March or earlier that Nutreco, which has considered acquiring Provimi at least twice in the past, was drafting a third bid, after the French business was listed for sale by its private equity owner Permira, Agrimoney.com reports.
If Nutreco wanted to buy Provimi on its own, it would have to come up with EUR 600 million from shareholders, according to KBC Securities analyst Pascale Weber.
DSM and Nutreco are up against competition from rival suitors Cargill Inc and China’s New Hope Group Co, according to two sources with knowledge of the matter who spoke late last month.
Permira should be getting final bids at the end of July, Bloomberg reports.
DSM may want to pursue the pre-mix part of Provimi while Nutreco may be more interested in the animal-food operation, according to Jos Versteeg, an analyst at Theodoor Gilissen Bankiers NV.
As well, Nutreco would benefit from a takeover by speeding up its move for expansion in developing countries apart from improving sales in Europe, which is now Provimi's biggest market.
Nutreco previously went after Provimi in 2002 and again in 2007, but was beaten both times by private equity groups, Permira's KoroFrance unit being the most recent one.
In addition to attracting food companies, the asset is drawing bids from chemical makers like DSM as they move away from more cyclical markets and branch out to encompass more technology-based enzymes and products manufactured for consumer products.
London-based Permira boughtt Provimi in 2007 from private equity rivals CVC Capital Partners Ltd and PAI Partners.
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