• Table of Contents • C&EN Classifieds • Today's Headlines • Cover Story • Editor's Page • Business • Government & Policy • Science & Technology • ACS News • Calendars • Books • Career & Employment • Special Reports • Nanotechnology • What's That Stuff?          Back Issues 2002 2001 2000 1999 1998  Safety Letters  Chemcyclopedia ACS Members can sign up to receive C&EN e-mail newsletter.   Join ACS			September 9, 2002 Volume 80, Number 36 CENEAR 80 36 p. 11 ISSN 0009-2347 BUSINESS HEFTY DOSE OF VITAMINS FOR DSM Acquisition makes Dutch firm largest in life sciences specialties market PATRICIA SHORT For roughly $2.24 billion, DSM will buy the vitamins and fine chemicals division of Switzerland's Roche. With the acquisition, DSM becomes the largest worldwide supplier, by far, to the life sciences sector, overtaking Degussa, BASF, and Lonza. The move also allows Roche to shed its last nonpharmaceutical operation and concentrate on its core drugs and diagnostics businesses. IN THE MIX Roche’s vitamin powders will boost DSM’s earnings. HOFFMANN-LA ROCHE PHOTO "This is a takeover that fits in perfectly with DSM's aims," says DSM Chairman Peter Elverding. The company has set a goal of sales of $10 billion in 2005, with 80% of that in specialty chemicals--a distinct change from the DSM of 2001, when petrochemicals made up 31% of the company's $8 billion in sales. Last spring, DSM sold its petrochemicals operations to Saudi Basic Industries, giving it a tidy pile of cash to spend on building up fine and specialty chemicals. Meanwhile, Roche put its vitamins and fine chemicals division up for sale in February. More than a dozen industrial and financial suitors expressed interest in the unit, despite the enormous fines levied on it by the U.S. and European Union following involvement in a vitamins price-fixing cartel in the early 1990s. Under the deal, Roche will retain all liabilities from the vitamin price-fixing case. According to Roche, the division is the world's leading supplier of vitamins and carotenoids, with annual sales of $2.40 billion and 7,500 employees. Vitamins account for half of that. Fine chemicals, including feed enzymes, citric acid, and ultraviolet filters, account for 30%; carotenoids, including beta-carotene and lycopene, make up the remaining 20%. The additional sales will give DSM a big boost toward its 2005 goal. DSM already employs some 10,000 people in the life sciences who generate annual sales of $2.3 billion in areas such as pharmaceutical chemicals, nutraceuticals, polyunsaturated fatty acids, and enzymes. Some of Roche's vitamins are commodities, which are facing price and profitability erosion, concedes Elverding. However, in other areas, he says, "there is no price competition whatsoever. We have at least 75% of our products for which we will be able to maintain our margins." The deal is expected to close in first-quarter 2003. Elverding does not anticipate any problems with regulatory authorities. For DSM, he says, "these are new products--new markets--where cartel problems don't play a part." Top Chemical & Engineering News Copyright © 2002 American Chemical Society			Related Story Fine Chemicals [C&EN, July 22, 2002] Related Sites DSM Roche E-mail this article to a friend Print this article E-mail the editor
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