Cargill has reached an agreement with Croda to acquire the majority of its performance technologies and industrial chemicals business for EUR 915,000,000 (USD 1.03bln. The investment would dramatically expand Cargill’s bio-industrial footprint to better serve industrial manufacturers searching for “greener” ingredient solutions. The purchase will allow it to turn agricultural raw materials into bio-based chemicals.
The transaction, which is subject to regulatory approvals, is expected to close in Summer 2022. Under the agreement, Cargill would gain nearly 1,000 employees around the world and production facilities spread across Europe and Asia. Aligning with Cargill’s commitment to sustainability, more than two-thirds of the raw materials used to manufacture these solutions are bio-based and renewable.
The divested business, which represented 77% of Performance Technologies and Industrial Chemicals (”PTIC”) 2020 revenue, is composed of five manufacturing facilities, including the Gouda plant in the Netherlands, the Hull plant in the UK and Croda Sipo in China (a joint venture in which Croda owns 65%), together with additional laboratory facilities supporting key aspects of the divested business’ activities in Smart Materials, Energy Technologies and Industrial Chemicals. The consideration of EUR915m includes 100% of Sipo in the divested business. If the sale of 100% of Sipo cannot be realized, Sipo will be excluded from the sale, reducing the consideration by EUR140m.
The retained parts of PTIC will provide integral support to the British Group’s Consumer Care and Life Sciences sectors. Going forward, Industrial Specialties will generate additional revenues from a new supply agreement, whereby Croda will supply certain ingredients from its retained manufacturing plants to the acquirer, the company announced.
“The bio-industrial space is a priority for Cargill, as we strive to support our customers with innovative, nature-based solutions that deliver real-world benefits,” said Colleen May, president of Cargill’s Bioindustrial business. “Combining our diverse, global supply chain and deep operational expertise with Croda’s extensive industrial business capabilities and broad bio-based portfolio will spark a new wave of innovation and create tremendous value for our customers.”
Steve Foots, chief executive of Croda, also commented: “Cargill is a company with a distinguished history and strong values. Under its ownership, the divested business and our talented, hardworking employees can look forward to a bright future.”
Photo credit: CRODA
