International agricultural processor and merchant Louis Dreyfus Company (LDC) has signed a binding agreement to buy BASF’s Food and Health Performance Ingredients business.
Headquartered in the Netherlands in Rotterdam, LDC serves more than 100 countries across 180 locations. This acquisition from BASF will see the company taking on board a production site and R&D centre in Illertissen, Germany, alongside three application labs outside of Germany.
The food and health performance ingredients business includes food performance ingredients such as aeration and whipping agents, food emulsifiers and fat powder grades; health ingredients such as plant sterols esters, conjugated linoleic acid (CLA), omega-3 oils for human nutrition and some smaller product lines.
BASF said its Food and Health Performance Ingredients portfolio plays a vital role in addressing growing trends in human nutrition. However, the business has limited synergies and integration into BASF and is no longer a strategic focus area.
“Building on our teams’ success to develop this business very well over the last years, LDC as a future-oriented company can offer our employees and portfolio a promising perspective,” said Michael Heinz, member of the board of executive directors of BASF and responsible for the Nutrition & Health division.
“The divestment of this business to LDC supports our strategic portfolio optimisation and will allow us to focus on our core businesses in Nutrition & Health. We remain committed to leveraging our core product platforms and expanding our business in key areas such as vitamins, carotenoids and feed enzymes.”
Through the proposed acquisition, LDC aims to leverage its existing strengths in oils and fats, glycerin and lecithin, as well as its global supply chains, to reinforce its global position in nutritional and functional ingredients.
“In line with our strategic plans for revenue diversification through more value-added products and growth in downstream markets, this agreement is an opportunity to accelerate LDC’s participation in the rapidly growing plant-based ingredients market,” added Michael Gelchie, LDC’s chief executive officer.
As part of the agreement, approximately 300 employees are expected to transfer from BASF to LDC as of the closing of the transaction.
“We are excited about the prospect of this transaction, as LDC’s first investment in dedicated facilities to produce food and health performance ingredients at scale,” Gelchie continued.
The agreement is subject to regulatory approvals and customary closing conditions.
