Dsm-firmenich agrees sale of animal health unit, $2.6 billion price tag disappoints

Feb 9 (Reuters) – Chemicals group dsm-firmenich announced the long-awaited sale of its animal nutrition and health business on Monday, but the agreed enterprise value of around 2.2 billion euros ($2.6 billion) disappointed some investors.

As part of the deal signed with private equity firm CVC Capital, dsm-firmenich will receive about 1.2 billion euros, with a potential further earnout of up to 500 million euros, while retaining a 20% stake in the business.

Analysts from KBC Securities said the sale value was around 800 million euros below the brokerage’s forecast. ING analysts had also expected a higher price tag of 2.4 billion euros.

Shares of the Amsterdam-listed group fell more than 6% by midday local time and could see their biggest one-day drop ever if the losses persist through the session.

The divestment follows the sale of dsm-firmenich’s feed enzymes activities for 1.5 billion euros last year and marks the final step in its push to become a fully focused consumer company active in nutrition, health and beauty, it said in a press release.

The company had first flagged plans to carve out the animal nutrition business in 2024 in a bid to lower its exposure to earnings volatility in the vitamins segment.

“While the delays to the ANH transaction and sizeable impairment are disappointing, we are glad that the sale has finally been announced and that dsm-firmenich can move forward cleanly,” ING said in a note to investors.

The deal will result in a non-cash impairment of around 1.9 billion euros before taxes in 2025, the company said. A cash tax, transaction and separation costs of 200 million euros will follow in 2026, with closing of the sale expected at the end of this year.

The group also said it would launch a 500-million-euro share buyback programme in the first quarter of 2026.

($1 = 0.8445 euros)

(Reporting by Jakob Van Calster in Gdansk, editing by Milla Nissi-Prussak)