DSM-Firmenich Reinvites Apollo Into Auction as CVC Bid Hits Snag

(Bloomberg) — DSM-Firmenich AG has invited Apollo Global Management Inc. back into the auction of its animal nutrition and health unit, creating a drawn-out two-horse race with CVC Capital Partners Plc, according to people familiar with the matter.

The sale has been hampered by differences over price and the challenging vitamins part of the business, with both buyout firms pushing DSM to separate that unit from the disposal, said the people, who asked not to be identified because discussions are private.

Amsterdam-listed DSM-Firmenich would prefer to sell the entire business in one swoop, but bidders’ concerns around the vitamins part, which faces margin pressure due to tough Chinese competition, is impeding those efforts, the people said. The buyout firms would like DSM to separate or restructure the unit or keep a stake in the vitamins business to address those concerns, the people said.

The company was aiming to sell the business for about €3 billion ($3.2 billion), but the price could go below that level based on current discussions, some of the people said. CVC was the sole remaining bidder, but DSM recently brought Apollo back into the race after it failed to reach an agreement on value and structure, the people said.

A decision on the winner and structure could be made in the coming weeks if the deal doesn’t fall apart, according to the people. Representatives for Apollo, CVC and DSM-Firmenich declined to comment.

Other previous parties including Bain Capital, Lone Star Funds and strategics such as Dutch animal nutrition firm Nutreco NV and agricultural commodity traders Archer-Daniels-Midland Co. and Cargill Inc. were also invited to the auction, people familiar said in April.

DSM-Firmenich, which has dual headquarters in the Netherlands and Switzerland, was formed in 2023 following the merger of Dutch chemicals company Royal DSM NV and Swiss ingredients maker Firmenich International SA. The combined entity caters to large consumer groups that want ingredient combinations that meet a range of criteria in taste, smell and functionality, as well as beauty companies seeking functional skincare ingredients.

The vitamin business under the animal nutrition and health unit is vulnerable to competition from Chinese rivals that are able to dominate the global market through lower costs. However, the animal health unit reported €3.32 billion of sales in 2024, a 3% rise from the previous year. The other parts of the business up for sale include specialty ingredients for animal nutrition and pre-blended solutions.

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