Danisco to buy Rhodia food additive business?
Danish ingredients giant is preparing to buy the food additive arm
of ailing French chemicals business Rhodia.
Speculation in the French press this week claims that Rhodia could announce the €250?00 million sale of its food ingredient business to Danisco next week.
This would mark Rhodia's first major asset sale after the company said in December that it planned to divest €700 million in non-core assets in 2004 to reduce its heavy debt, standing at €2.3 billion at the end of 2003.
On the look out for acquisitions to absorb the impact on revenues of imminent changes to the EU sugar regime ?predicted to cut sugar profits by 40 per cent for Danisco ?the Danish sugar and ingredients market leader will be notably interested by the higher margin ingredients in Rhodia's portfolio.
The flavours slice of the French firm's food business would slot in particularly well with Danisco's ambitions to become one of the top five global flavour players.
Analysts Goldman Sachs predict that Rhodia's food ingredients sales could amount to around €500 million and the flavour business could be worth around €150 million.
"We forecast 2003/04 annual sales for Danisco's ingredients division of DK8.4 billion, of which flavours accounts for around DK1.3 billion," said Goldman Sachs.
Yesterday the Danish ingredients firm remained tight-lipped. "We are a public-listed company and if there is news we will go through the normal channels," a spokesperson for Danisco told FoodNavigator.com.
Rhodia's newly appointed chief executive Jean-Pierre Clamadieu could announce the sale as soon as 13 February, when the company is due to report its 2003 results, Le Figaro said, citing unnamed sources.
Last year the group committed to sell €700 million worth of non-core assets by the end of 2004. With the additives alone, it would achieve 30 to 40 per cent of this target, Le Figaro added, pitching the price range for the sale between €250 and €300 million.
Earlier this month the French chemicals firm, also believed to be looking to shed its core silicones division and parts of its phosphates branch, announced a round of 572 job cuts at its French operations. In December the company came under increasing pressure as it posted a first-half loss of €150 million for 2003, warning at the same time that little improvement would be expected for the last six months of the year.
