Croda has agreed a £778 million deal to sell the bulk of its performance technologies and industrial chemicals businesses.
US agri-giant Cargill has swooped for five of the East Yorkshire-headquartered FTSE-listed firm’s global plants - including Hull in the 海角视频.
The sale follows a strategic review into the “excellent, world-leading business” announced back in May, with a Dutch plant at Gouda and Sipo in China also featuring.
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It comes almost 40 years since a deal between the two for Hull’s rapeseed oil extraction plant, and is described as dramatically expanding Cargill’s bioindustrial footprint to "better serve industrial manufacturers searching for 'greener' ingredient solutions".
Steve Foots, chief executive of Croda, said: "Today's announcement completes our transition into a pure-play consumer and life sciences company. We will focus our capital and resources on delivering sustainable solutions and scaling our consumer, health and crop care technologies, leading to consistent sales growth and an even stronger profit margin.
"Cargill is a company with a distinguished history and strong values. Under its ownership, the divested business and our talented, hardworking employees can look forward to a bright future."
The deal involves 77 per cent of the performance technologies and industrial chemicals business, with additional laboratories alongside the key plants. The business units support automotive, polymer and food packaging applications.
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It will see the transfer of around 1,000 employees within a business that generated £382 million in sales to June 30, bringing an operating profit of £49 million.
The remainder will “provide integral support to the group's consumer care and life sciences sectors” while also generating revenues from new supply agreements with Cargill, with divested interests also producing for Croda in a reciprocal deal.
Mr Foots said the China asset is a joint venture in which Croda owns 65 per cent, with the deal dependent on it buying out the partner. Should it not be realised, Sipo will be excluded from the deal, reducing the cost by £119 million.
Croda will use the proceeds to increase its health care interests while further developing its position as a sustainability leader in consumer care and crop care markets. Potential acquisitions of “disruptive technologies in existing and adjacent markets” are also being eyed.
A completion is eyed for summer 2022, and is subject to regulatory approvals.
Cargill is one of the largest privately-owned firms in the States, with a 150 year legacy which began with food and agriculture, stretching across industry and finance - with a global reach.
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Colleen May, president of Cargill's bioindustrial business, said: "The bioindustrial space is a priority for Cargill, as we strive to support our customers with innovative, nature-based solutions that deliver real-world benefits. Combining our diverse, global supply chain and deep operational expertise with Croda's extensive industrial business capabilities and broad bio-based portfolio will spark a new wave of innovation and create tremendous value for our customers."
As well as the Stoneferry mill, in Cargill’s hands since 1985, the company is part of a joint venture with Associated British Foods in Frontier Agriculture, a Lincolnshire-headquartered crop production and grain marketing business. It uses Port of Hull, with an £8 million investment in new facilities completing.
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