Degussa Selling Food Ingredients Unit

FRANKFURT, Germany – Chemicals company Degussa AG said Friday it will sell its food ingredients unit to U.S. conglomerate Cargill Inc. for 540 million euros ($670.6 million), to focus on its core business.

The unit makes colorings and sweeteners for candy, beverages and other foods. The deal, terms of which were not disclosed, is subject to approval by European and U.S. regulators as well as Degussa’s board of directors.

“Food ingredients are a strategically ideal fit for a strong global food industry player such as Cargill,” Degussa chairman Utz-Hellmuth Felcht said. “We feel that we have placed these operations in good hands, and are very satisfied with the transaction as a whole.”

The Duesseldorf-based company decided last year to put its food ingredients unit up for sale because it wanted to focus on its core business.

The Degussa unit employs nearly 2,100 workers and had sales of 441 million euros in 2004. Degussa employs a total of 45,000 workers worldwide and last year posted sales of 11.2 billion euros.

Shares of Degussa were up nearly 1 percent to close at 35.64 euros ($44.25) in Frankfurt trading.

Cargill, the biggest privately held company in the U.S., employs more than 124,000 workers in 59 countries and had sales of $71 billion in the 2004-2005 fiscal year.

It is the biggest grain producer in the United States and its Excel meatpacking unit is one of the country’s biggest. Its brands include Diamond Crystal salt, Gerkens cocoa and Sterling Silver fresh meats.

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On the Net:

http://www.degussa.de

http://www.cargill.com