Content area
Full text
Dutch merger will yield leader in fermentation for antibiotics and foods.
DSM NV HAS MADE a friendly bid for Royal Gist-brocades NV to form what it claims will be a global technology leader among suppliers of ingredients to the pharmaceutical and food sectors.
The deal, announced last week, is a cash and share offer valued at F12.7 billion ($1.3 billion), equivalent to a 30 percent premium on Gist-brocades' share price and a price-to-earnings ratio of 19 percent.
The merger will increase DSM's total sales from Fl 12.4 billion last year to Fl 15 billion, 25 percent of which will consist of fine chemical and biotechnology-based ingredients for pharmaceuticals, foodstuffs and cattle feed.
The company will have a life sciences business of around Fl 3.7 billion, 60 percent in pharmaceuticals, and the remainder in food and feed.
Last year, 12 percent of DSM sales were in fine chemicals, mostly for pharmaceuticals. Polymers and industrial chemicals will decrease from 48 percent to 40 percent of sales, and performance materials from 35 percent to 30 percent.
"Through this move, we are realizing a major shift towards higher added-value projects, while at the same time making our activities less cyclical," said DSM chairman Simon de Bree. DSM is regarded by analysts as being one of the most cyclical of Europe's major polymer and bulk chemical producers.
Gist-brocades,...