May 31 (Reuters) – Dutch specialty chemicals maker DSM said on Tuesday the group would merge with Swiss counterpart Firmenich, and separately announced the sale of its engineering materials subsidiary to fund Advent International and chemical German Lanxess.
The title DSM gained around 7% on the Amsterdam Stock Exchange at 8:50 GMT, its best performance since March 2000 and, at the top of the Stoxx 600, Lanxess jumped 11% at the start of the morning.
DSM and Firmenich said the merger, which is expected to be completed in the first half of next year in both stock and cash, could lead to organic sales growth of 5% to 7% per year and cost savings. annual costs of 350 million euros.
This would make the combined group a major supplier of food ingredients and beauty and wellness products.
DSM shareholders will own 65.5% of the new Dutch-Swiss group, while current Firmenich owners will hold the rest of the shares and receive 3.5 billion euros in cash.
DSM also announced on Tuesday the sale of its engineering materials subsidiary to Advent International and Lanxess for 3.85 billion euros.
The Dutch group said last September it would sell its materials division, the engineering part of which makes thermoplastics used in food packaging and electronics, to focus solely on producing sustainable food and health products.
Advent and Lanxess plan to combine DSM’s engineering materials business with Lanxess’ high-performance materials business in a joint venture in which Advent will hold a 60% stake and Lanxess will 40%.
The deal with Firmenich values DSM at 21.6 billion euros, after adjusting for the materials division, which also includes a protective materials subsidiary, the company said.
The new company will be based in Switzerland, with headquarters in Kaiseraugst and Maastricht, in the south of the Netherlands. The shares will remain listed on Euronext Amsterdam. (Bart Meijer and Toby Sterling report, French version Elena Vardon, edited by Kate Entringer)