Dutch ingredients group has reached an agreement with compatriot starch producer Avebe over the acquisition of the latter's Glucona unit. CSM has been linked to a takeover of Glucona for some time.
According to a statement released by CSM, its has reached agreement in principle with Avebe to buy the gluconic acid derivatives activities Glucona, one of the leading companies in this particular field with production facilities in Ter Apelkanaal in the Netherlands and Janesville in Wisconsin, USA.
CSM will pay €35 million in cash for the business, which generates sales of around €30 million. CSM said that the acquisition would contribute immediately to its results, although only modestly in the first financial year.
The Glucona business will become part of the CSM Biochemicals unit which, under the name of PURAC, is the global leader in lactic acid and lactic acid derivatives, according to CSM. Like lactic acid, gluconic acid is an organic acid produced by fermentation, and the gluconic acid derivatives from PURAC will be used as a calcium and mineral enricher in food and pharmaceutical products.
The acquisition fits into CSM's strategy of expanding its activities worldwide in these key market segments. The integration of the gluconic acid derivatives activities in CSM Biochemicals will also provide synergy opportunities.
CSM said that the agreement covered the vast majority of Glucona's operations, but that Avebe was still in negotiations with a third party on the acquisition of the other activity - the production of speciality starches (excipients) - which are used in the pharmaceutical industry.