Chr. Hansen Sells Majority of its Functional Blends Business to Frutarom

Chr. Hansen has entered into a definite agreement to sell the majority of its functional blends activities including a production plant in Italy to Frutarom Industries Ltd. at a total consideration of EUR 25 million.

5/26/2011 --- As a continuation of the strategy to optimize the business portfolio and to focus on areas where the company holds leading positions, Chr. Hansen has divested the majority of its functional blends activities.

Chr. Hansen has entered into a definite agreement to sell the majority of its functional blends activities including a production plant in Italy to Frutarom Industries Ltd. at a total consideration of EUR 25 million. The transaction, which remains subject to normal closing conditions, is expected to be completed in the fourth quarter of the financial year 2010/11.

Turnover for the divested functional blends activities accounted for EUR 19 million in the financial year 2009/10. Functional blends are ingredient blends used by meat producers in the production of sausages and cooked ham.

“Our decision to sell these activities is in line with Chr. Hansen’s overall strategy to continuously optimize our business portfolio and to focus on and invest in areas where we already have – or can grow into – leading positions. By reducing complexity, the divesture will enable us to focus even more on building a strong global platform in the meat ingredients business with dedicated focus on meat cultures and natural colors.” explains Carsten Hellmann, Executive Vice President, Global Sales, Chr. Hansen.

The transaction is not expected to have a significant impact on the result for the year. The transaction includes 45 employees from Parma and other parts of Chr. Hansen’s European organization.

The acquisition will provide Frutarom with a substantial presence in Italy and will serve as a platform from which to expand into this important market. According to President and Chief Executive Officer of Frutarom, Ori Yehudai: “The acquired activity holds significant market share in the fields of savory flavors and processed meat in Italy, and it will strengthen Frutarom’s position among these customers while significantly increasing our local presence and share in this important market. The acquisition considerably boosts Frutarom’s technological capabilities and its product offering to customers worldwide in the field of savory flavors and functional products, as well as our extensive global customer base.”

Included among the assets purchased is a state-of-the-art, high-capacity plant located in Parma, Italy, which will enable Frutarom to increase its activities and take advantage of operational synergies with its existing savory activities in Europe. Also included among the assets are innovative R&D laboratories. Some 45 employees will augment the Frutarom workforce with skills and experience at all levels, including R&D, marketing and sales of savory taste systems.

The acquired activity is highly synergistic with Frutarom’s current savory competencies in Europe, which have grown significantly in recent years via a number of acquisitions, including the German companies Gewürzmüller and Nesse (acquired in 2007 and 2006 respectively), the German Savory Functional Systems activity of Chr. Hansen (acquired in 2009), along with the acquisitions of EAFI and Rieber, completed in early 2011. Joining Frutarom’s successful group of savory activities, this latest acquisition maximizes the company’s existing synergies in the field. Ori Yehudai adds: “We will strive to take advantage of the cross-selling opportunities offered by this acquisition and exploit to the fullest extent the commercial and operational synergies across the relevant countries in order to reach optimal efficiency and maximum savings.”