The Roche healthcare group announced on Tuesday that it is to sell its vitamin and fine chemicals business.This content was published on September 3, 2002 - 09:26
The deal with the DSM group in the Netherlands is worth €2.25 billion (SFr3.31 billion).
Roche said in a statement from its headquarters in Basel that it was selling the unit to Dutch Life Science and Performance Materials so it could focus on its core healthcare business.
World leader in vitamins
The division is the world's leading supplier of vitamins and carotenoids with annual sales of SFr3.5 billion.
Roche announced in February that it wanted to put its vitamins business on the market.
The sale price fell short of some analysts' valuations but Franz B Humer, Roche's chairman and CEO, described it as a "good, fair price".
"This is a significant step for Roche to further focus our group on our two high-tech pillars, pharmaceuticals and diagnostics," said Humer.
"With the acquisition of Boehringer Mannheim, the spin-off of Givaudan, the acquisition of a majority interest in Chugai and a number of supplementary acquisitions and alliances ... we have clearly positioned Roche as a leading, innovation driven healthcare company."
Humer said that he hoped to complete the deal, which needs approval by regulators, by early next year.
"Good prospects and continuity"
"The division's product range for animal feed, food, pharmaceutical and cosmetics industry, supplements the core business of DSM," he commented.
"This is an excellent basis offering good prospects and continuity to the division and its employees."
Analyst reaction indicated that the deal was viewed as slightly better for Roche than for DSM, despite the price being lower than expected.
"We see this as good news for Roche, allowing it to concentrate on its core pharmaceutical and diagnostics divisions which are growing strongly," said Andrew Pendrill, an analyst at ABN AMRO in London.
Roche also said in the statement that it would maintain all current and future liabilities stemming from price-fixing cases against its vitamin business.
Based at Kaiseraugst near Basel and with a staff worldwide of 7,500, the division has been involved in a number of cases in recent years that prompted negative headlines.
In 1999, Roche agreed to pay a fine of $500 million to US authorities in a settlement covering charges filed against the group for anticompetitive conduct in the US bulk vitamins market.
A company manager agreed to serve a four-month prison term and pay a fine of $100,000 in the case.
In November 1999, Roche and other vitamin companies settled class action suits with US bulk vitamin customers involved in the antitrust investigations. Roche paid $632 million as part of the agreement.
Last November, Roche was fined €462 million by the European Commission for its involvement in a price-fixing cartel in vitamin products.
The Commission slapped a further fine of €64 million on the company two weeks later for its role in a price-fixing cartel in citric acid, an additive used in soft drinks and food.
swissinfo with agencies
The price of €2.25 billion was less than analysts expected.
Roche will maintain all liabilities from price-fixing charges.
The vitamin and fine chemicals unit employs 7,500.
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