Roche sells vitamins business to DSM
said it has agreed the sale of its leading vitamins unit to Dutch
chemicals company DSM for €2.25 billion.
Roche said it will sell its vitamin unit to the Dutch chemicals manufacturer DSM for €2.25 billion, as the Swiss company seeks to focus on its core pharmaceuticals.
The world's leading supplier of vitamins and carotenoids has annual sales of SF3.5 billion (€2.4 bn). Analysts had however expected the unit to sell for 1.5 times its sales. Under the agreement, the present and future liabilities from Roche's vitamin price-fixing case will remain with the pharmaceutical company. The transaction still needs to be approved by antitrust authorities.
The vitamins division, which will become a unit of DSM, is headquartered in Kaiseraugst, Switzerland and employs 7,500 people. The sale will help Roche focus on developing medicines, where its sales growth has recently fallen behind that of its competitors.
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."
Roche pioneered the industrial synthesis of vitamin C in 1934, and the vitamins division currently supplies vitamins, carotenoids, citric acid and other fine chemicals to the food, pharmaceutical and cosmetics industry. In the first half of 2002 the vitamins unit had sales of SF1,747 billion, an EBITDA of SF256 million and an operating profit of SF140 million.
The acquisition of the unit is an important step in DSM's Vision 2005 plan, announced in 2000, which involves a concentration on life science products and performance materials. DSM has targeted sales growth of €10 billion by 2005, with acquisitions making up an important part of the growth strategy.
Peter Elverding, DSM's managing board chairman said : "The combination of DSM's life science products and Roche's vitamins and fine chemicals business 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 from the joint activities in these areas."
He continued: "The combination of DSM's and the vitamins and fine chemicals division's leading (bio)-technologies will allow an acceleration of innovation, for instance in nutritional ingredients and functional foods."
DSM, which had sales of €8 billion in 2001 and half year sales for this year of € 2.8 billion, recently finalised the sale of its petrochemical activities, part of Vision 2005. The sale contributed to a first half net profit of €1,027 million.
In 2001 Roche reported full year sales of SF29,2 billion and a net income of SF4,8 billion.
