Chr Hansen ingredients deal closed

PAI's acquisition of Chr Hansen's ingredients business was finally
closed last week, establishing Chr Hansen Holding - and thus the
Chr. Hansen Group - as a purely pharmaceutical company.

French firm PAI, which for some years has been consolidating its position in the food sector, paid €1.1 billion for the number one culture maker. The closure follows European Commission clearance for the deal, which should benefit both parties.

Chr Hansen believes that PAI will provide the ingredients business with the necessary financial backing. Capital investments are expected in factories, R&D, and marketing efforts.

Similarly, PAI are buying a division in rude health. Last year the ingredients unit contributed the majority of revenue to the group, €450 million, compared to the €141 million in revenue from the pharmaceutical unit, ALK-Abello, which focuses on allergy treatment and asthma prevention products.

The closure of the sale has nonetheless triggered a major reshuffle at Chr Hansen. Executive vice presidents Lars Frederiksen, Leif Nørgaard, Peter Olesen and Hans Thorkilgaard have resigned from the corporate management of Chr. Hansen Holding, but they will continue in the corporate management of Chr. Hansen under the ownership of PAI partners.

Susanne Grøn and Svend Laulund, board members of Chr. Hansen Holding elected by the employees, have resigned from the board of directors as of today.

And Erik Sørensen, president and CEO of the Chr Hansen Group since 1995, will resign his position as of August 15, 2005. Jens Bager, President and CEO of ALK-Abelló A/S, will also assume the position of President and CEO of Chr. Hansen Holding.The board of directors of Chr Hansen Holding now intends to distribute excess capital back to the shareholders as soon as possible following the audit, which is carried out in connection with the preparation of the annual accounts for 2004/05.

PAI, which recently spun off natural ingredients firm Diana-Ingredients, has made a host of acquisitions in the food sector. Recent deals include the French dairy products company Yoplait, UK biscuits manufacturer United Biscuits for €2.8bn, and €555m for Panzani Lustucru, a pasta sauce specialist.

Indeed, it would seem the stable European food and drink industry, the largest industrial sector in the EU, with a turnover of €799 billion in 2003, is attracting new investors through private equity.

According to a report from 3i, private equity and venture capital invested in Europe's food and drink companies nearly doubled from €2.7 billion in 2001 to €4.5 billion in 2002.

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