US food giant Cargill has made a bid to take over Dutch animal-nutrition concern Provimi. It was revealed on Monday that the two companies conducted exclusive talks on the 1.5-billion-euro deal.
Netherlands-based branch competitor Nutreco and Dutch chemical giant DSM were also investigating the option of making a joint bid for Provimi. In late July, the two companies issued a statement that “they have decided to jointly explore the possibility to acquire Provimi, should this opportunity arise”.
Operations in 26 countries
Rotterdam-base Provimi makes ingredients and additives that are used in animal feeds for livestock, chickens and pigs. Globally, Provimi has operations in 26 countries and employs more than 7,000 people across Asia, Europe, Africa and Latin America.
Cargill - an international producer of food as well as agricultural, financial and industrial products and services - has a growing animal-nutrition business unit.
Strategic match
The two companies spoke of a strategically-strong match, “both geographically and culturally”. Provimi’s market position in Latin America, Russia and Asia is in line with Cargill’s growth plans to be global leader in animal nutrition.
"Today's acquisition is a significant move for Cargill into the higher value-added segments in the animal-nutrition market," said vice chairman Paul Conway.
Provimi CEO Ton van der Laan said Cargill made a “transparent and convincing presentation to become our new owner and we believe our combined forces will produce a strong company.”
Provimi owner makes huge profit
Provimi is being sold by its private-equity owner Permira, which acquired the company in 2007 for around 580 million euros. Provimi posted profits before tax of 154.2 million euros, with a turnover of 1.6 billion, in 2010. Profits for the first half of 2011 are up 20.3% from the same period last year.
On completion of the sale, Permira will have made 2.3 times the cash it put into its original acquisition of the whole Provimi group in 2007.
(jn)
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One wonders how the takeover might negatively affect product quality. This issue rarely comes to light yet in this case directly impacts all levels of the food chain.
Get financially involved with an American company and you end up burning your fingers. Cargill? The very last company I would do business with.
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