CSM, the Dutch food ingredients conglomerate had announced that it sold its bakery supplies business for Eur850 million or US$1.1 billion. The buyer is private equity firm Rhone Capital and CSM with its sale would focus on the profitable food ingredients business.
The bakery supplies business makes muffins and pastries for US and European retailers.The decision to sell is blamed on weak consumer spending and high costs of raw materials. In taking this decision, CSM would be selling off nearly 77% of its annual sales revenue.
In turn, CSM would be focusing on lactic acid, a product used from salad dressing and beverages to household cleaning materials. It is also used in making icings and filling, emulsifiers, bakery colorings and flavors.
The proceeds of the sale would be utilized for acquisitions, dividends to shareholders and pay for pension liabilities incurred by the company. The sale is exepcted to be completed by the third quarter of 2013, subject to regulatory approvals.
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