Taste and nutrition company, Kerry Group Plc., has announced that it has entered into an agreement to acquire part of the global lactase enzyme business of Chr. Hansen Holding A/S and Novozymes A/S on a carve-out basis.
The deal comprises certain trade and assets of Chr. Hansen’s global lactase enzyme business and 100% of the share capital of Nuocheng Trillion Food (Tianjin) Co. Ltd, a Chinese subsidiary of Novozymes.
This acquisition is subject to European Commission approval of Kerry as a buyer and forms part of the Novozymes and Chr. Hansen merger approval process.
The company has said that the Lactase Enzymes Business further enhances Kerry’s biotechnology solutions capability.
The acquisition adds enzyme technology which helps create lactose-free and sugar reduced dairy products, while preserving their taste.
According to Kerry, Global demand for lactase is being driven by increased awareness of lactose intolerance, while many consumers are also choosing lactose-free for lifestyle and health reasons.
The Lactase Enzymes Business had attributable revenue of approximately €40 million in 2022 with sales in over 50 countries.
Total consideration is €150 million subject to routine closing adjustments, with the acquisition expected to close in the first half of 2024, according to Kerry Group.
Kerry Group finances
At the end of October, Kerry reported that its full year earnings guidance is expected to be at the lower end of the 1% to 5% constant currency range previously stated.
In an interim management statement for the third quarter (Q3) of 2023, Kerry said that year-to-date volumes at its dairy business, Dairy Ireland, were down by 6.2%, with margins also impacted by “challenging market conditions”.
Dairy Ireland volumes fell by 12.1% in Q3, “as input cost dynamics continued to impact overall market demand”, while pricing dropped by 17.6% over the period.
Group margin expanded by 100 basis points, driven by the company’s taste and nutrition division, which showed volume growth of 1.6% in Q3 and overall volume growth of 1.5%.
“Overall volumes in the division remained solid considering customer and industry dynamics,” Kerry stated at the time.
Although market conditions remained uncertain at the end of October, Kerry Group said it remains “well positioned with a good innovation pipeline”.