In a significant corporate maneuver, DSM-Firmenich AG has reopened its auction for the animal nutrition and health unit, reigniting competition between Apollo Global Management and CVC Capital Partners. This decision comes as both private equity firms attempt to navigate complex negotiations surrounding the valuation of the unit, which is currently set at around €3 billion ($3.2 billion).
The animal nutrition and health unit, part of DSM-Firmenich's broader portfolio, generated €3.32 billion in sales in 2024. However, the sale process has been complicated by disagreements over the pricing and performance of the unit’s vitamins business, which faces challenges from low-cost competitors in China. Apollo and CVC have urged DSM-Firmenich to consider options such as restructuring the vitamins segment or retaining a minority stake to alleviate margin concerns. DSM-Firmenich, however, prefers to sell the unit as a complete package, which could potentially yield a more favorable outcome in terms of valuation.
Earlier in the bidding process, other private equity firms, including Bain Capital and Lone Star Funds, as well as strategic buyers such as Nutreco, Archer-Daniels-Midland, and Cargill, expressed interest but did not progress to the final stages of negotiations. CVC had briefly emerged as the sole remaining bidder before DSM-Firmenich re-engaged Apollo in the auction.
A final decision regarding the winning bidder and the transaction structure is expected in the coming weeks, as both private equity firms continue to refine their proposals. The timeline for closure remains uncertain but is anticipated to be resolved shortly following this renewed interest.
This auction has significant implications for DSM-Firmenich's strategic direction and financial health, potentially impacting shareholders and employees depending on the outcome. The deal, should it proceed, will require regulatory approvals, particularly concerning antitrust considerations, given the scale and nature of the businesses involved.
As the bidding process unfolds, market observers will be keenly watching the developments, particularly the potential effects on DSM-Firmenich’s operational strategy and financial performance, as well as the broader market dynamics within the animal nutrition sector.