Food & Health Performance Ingredients business no longer a focus area for BASF; deal includes production site in Illertissen, Germany.
December 23, 2024
BASF announced that it has signed a binding agreement to sell its Food & Health Performance Ingredients business to Louis Dreyfus Co. (LDC), a leading global merchant and processor of agricultural goods including high-quality, plant-based ingredients.
The agreement includes a production site and state-of-the-art research and development center in Illertissen, Germany, and three application labs outside of Germany.
BASF said its Food & 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.
As part of the agreement, approximately 300 employees are expected to transfer from BASF to LDC as of the closing of the transaction. Both parties have agreed not to disclose financial details of the transaction. Continuous and reliable supplies and business relationships will not be impacted by this transaction.
The Food & Health Performance Ingredients business produces and globally commercializes plant-based 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, omega-3 oils for human nutrition, and some smaller product lines.
“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 the portfolio a promising perspective,” said Michael Heinz, member of the board of executive directors of BASF SE who is responsible for the Nutrition & Health division. “The divestment of this business to LDC supports our strategic portfolio optimization 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.”
Michael Gelchie, LDC chief executive officer, added, “In line with LDC’s 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. 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.”
Through the proposed acquisition, LDC said it 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.
“BASF’s Food & Health Performance ingredients business is highly complementary to LDC’s existing Food & Feed Solutions Platform portfolio, and with the integration of these activities, we see strong potential to accelerate LDC’s evolution from reliable raw material provider to trusted solutions advisor as well, partnering our global customers to develop attractive applications for bakery and confectionary, non-dairy, instant foods, personal care and health care,” said James Zhou, LDC chief commercial officer and head of Food & Feed Solutions.
The transaction is subject to customary closing conditions, including approval from relevant regulatory bodies.
The BASF Group portfolio comprises six segments: Chemicals, Materials, Industrial Solutions, Surface Technologies, Nutrition & Care and Agricultural Solutions. BASF Nutrition & Health provides a comprehensive product and service range for the human and animal nutrition, pharmaceutical and flavor and fragrance industries.
Founded in 1851, LDC’s activities span the entire value chain, from farm to fork, across a broad range of business lines: Carbon Solutions, Coffee, Cotton, Food & Feed Solutions, Freight, Global Markets, Grains & Oilseeds, Juice, Rice and Sugar.
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