Final sugar high for Danisco pending sale
The agreed sale of the division was announced in July 2008. Norduzcker agreed to pay an enterprise value of DKK 5.6 bn, with the addition of around DKK 600 m from sale of EU sugar quota. This amounts to a total of around €750m.
A decision from the German regulatory authorities is expected towards the end of February, after having been delayed for want of more information.
Figures released by Danisco yesterday indicate that it is exiting sugar in good form. Its sugar factories in Denmark, Sweden, Finland, Germany and Lithuania produced some 1,003,000 tonnes of sugar in the just-closed 2008/9 campaign.
This result was below that of 2007/8, which came in at 1,069,000 tonnes, since Danisco renounced some of its quota under the new sugar regime. Its total quota was actually 922,000 tonnes, but Thomas Olsen, EVP of agriculture at Danisco, explained this as due to an increase in beet acreage to support bioethanol production.
Although production was said to be “characterised by high stability” across all the factories, very different weather conditions meant that the beet yield differed from country to country.
Heiner Reiners, a spokesperson for Nordzucker, told FoodNavigator.com earlier this month that the deadline for the competition review by the German Bundeskartellamt had been pushed pack a month.
“During conversations with the Bundeskartellamt we learned that there are some questions left that simply need more time to be adequately answered.”
As a result, Nordzucker asked for more time, until 20th February, to provide more answers. According to Reiners, the company’s view is that there is no need to reach a decision under pressure to close the transaction as soon as possible.
While he was unable to give details on what aspects of the deal are under discussion, it is possible that fulfilment will have some preconditions attached.
However the sheer size of the deal, and the fact that it is “the largest in the industry for many years, and the first of this size under the new sugar regime” means the buyer was prepared for considerable scrutiny.
Reiner said that the final decision could also be relevant for deals in the future. “It is logical that [Bundeskartellamt] is interested in a thorough investigation.”