KD Pharma acquires dsm-firmenich’s marine lipids business

19-Jul-2024 - Last updated on 19-Jul-2024 at 14:26 GMT

dsm-firmenich is selling its marine lipids business to the KD Pharma Group in exchange for a minority stake in the enlarged KD company. The deal would make KD Pharma the largest manufacturer of omega-3 fish oils.

The acquisition includes dsm-firmenich’s marine lipids fish oil omega-3 business for the food and beverage, dietary supplement and pharma markets, together with the MEG-3 brand and production facilities in Piura, Peru and Mulgrave, Canada.

As part of the transaction, dsm-firmenich will obtain a minority stake of 29% in KD Pharma's parent company O³ Holding GmbH.

Oscar Groet, CEO of the KD Pharma Group, said, “We are thrilled to welcome dsm-firmenich’s marine lipids portfolio into the KD Pharma Group, a move that aligns perfectly with our strategic vision of being technology leaders in lipids and enhancing our ability to innovate and deliver exceptional value to our customers."

dsm-firmenich disclosed that the MEG-3 business represented approximately €170 million sales in 2023, with approximately 200 employees who will transfer to KD Pharma.

The transaction is expected to be completed towards the end of 2024, subject to customary regulatory approvals.

Building a portfolio

The deal expands KD Pharma Group‘s lipids CDMO business and will create a “well-equipped market player in marine lipids by combining the best of the two companies and respective expertise, with the scale of dsm-firmenich’s Piura and Mulgrave sites and the high concentration capability of the KD Pharma Group company”, said KD Pharma in a press release.

DSM obtained the MEG-3 fish oil business when it acquired Ocean Nutrition Canada (ONC) in 2012 for C$540 million. This followed DSM’s acquisition of Martek Biosciences Corporation’s algae platform for about $1 billion in 2011.

Adam Ismail, KD Pharma’s chief strategy officer, told NutraIngredients that the acquisition includes part of what was the ONC business but stressed that the deal does not include the powder manufacturing that ONC had in the U.S.

dsm-firmenich will continue to offer MEG-3 fish oils for the early life nutrition markets as well as MEG-3 powders. In addition, dsm-firmenich’s algae business is not included in the deal.

Commenting on the size of the combined business, Ismail said: “DSM was the largest in terms of volume already by itself, so with KD we would be the largest manufacturer of omega-3 fish oils.”