Hopes for National Starch to be sold by the end of the year have been dashed by the credit crisis and a sale is unlikely in the near future, said owner Akzo Nobel.
Akzo made clear its intention to seek a new owner for the specialty starches business after it became the owner of National Starch and Chemical Company as part of its acquisition of ICI in January.
However, a spokesman for the company told FoodNavigator-USA.com: “It’s still for sale but we don’t see any deal soon because of the credit crisis.
“We have a couple of interested buyers. But all these buyers have financing problems."
He said the buyers remained interested, but “they also depend on all kinds of financial instruments”.
Meanwhile, Akzo would rather hold on to the business and try and get a “fair price”, which it said is unlikely in the current economic climate.
The spokesman added: “We will sell it when the time is right. In the meantime we are happy to own it. It is profitable and it is serving a stable sector.
“We will manage the business from arms length in 2009.
“It is a stand alone unit. We will not integrate it into Akzo Nobel units.”
A National Starch spokesman told FoodNavigator-USA.com in the summer that Akzo was “anticipating we end up sold by the end of the year”.
National Starch was made up of four businesses: Electronic Materials and Additives, which were sold to German based Henkel in April, Specialty Polymers, which has been integrated in AkzoNobel's Specialty Chemicals business and specialty starches.
The Food Innovation Group which falls under the specialty starches banner, creates food ingredients to enhance texture, nutrition, appearance and flavor delivery.
Possible new owner
There has been speculation about potential buyers for National Starch Food Innovation with ADM emerging as a likely contender, according to Chandrasekhar Shankaar, an analyst at Frost & Sullivan.
He commented earlier this year that it was likely to snapped up by a market leader, rather than someone new coming in, as the starch industry is consolidating.
Major players in the starch market include Tate & Lyle, Cargill and ADM.
As a rough estimate Shankaar said that a buyer was likely to pay between $5.5bn and $6bn.
In North America starch is typically used as in ingredient for improving texture, thickening or binding in almost all food products. Major sources of starch as an ingredient in food production are corn, rice, wheat and potatoes.