Rhodia completes ingredients sale to Danisco

Chemicals group Rhodia signed off the sale of its food ingredients business to ingredients giant Danisco today, in a deal worth €320 million.

The sale, announced on 13 February, gives Danisco a leading share in the probiotics market, taking over from Rhodia as the number one supplier of probiotics to supplements.

It also pushes down current number one cultures player Chr Hansen into second position.

The sale includes Rhodia's hydrocolloids and food safety products activities, which along with cultures, generated sales of €211 million in 2003.

The transaction, a higher price than first announced, should be finalized in May, once legal authorizations have been received.

The move is a key step in Rhodia's recovery plan and will contribute significantly to the reduction of the group's debt.

"We are divesting this business, which has few synergies with the rest of Rhodia, under excellent terms. The transaction will generate almost half the €700 million to be raised from divestments this year with a much higher multiple than we had targeted," said Rhodia CEO, Jean-Pierre Clamadieu.