Croda sells bulk of PTIC business to Cargill for €915.0m

Chemicals company Croda revealed on Wednesday that it had signed a definitive agreement to sell the majority of its performance technologies and industrial chemicals businesses to Cargill for €915.0m on a cash-free, debt-free basis.

Croda said the divested businesses, which represented 77% of the division's revenues in 2020, was made up of five manufacturing facilities, including its Gouda plant in the Netherlands, the Hull plant in the UK and Croda Sipo in China, together with additional laboratory facilities.

The FTSE 100-listed group highlighted that the consideration of €915.0m included 100% of its interest in its Sipo joint venture, in which it owns 65%, and added that if the Sipo sale cannot be realised, it will be excluded from the sale, reducing the consideration by €140.0m.

Croda stated that the transaction followed "a comprehensive strategic review" of its performance technologies and industrial chemicals division to determine "the best ownership structure" to ensure the future success of the business.

Chief executive Steve Foots said: "Today's announcement completes our transition into a pure-play consumer and life sciences company. We will focus our capital and resources on delivering sustainable solutions and scaling our consumer, health and crop care technologies, leading to consistent sales growth and an even stronger profit margin."

Croda will now work together with Cargill to separate the two businesses, with completion of the transaction expected in Summer 2022, subject to receiving customary regulatory approvals.

As of 0840 GMT, Croda shares were down 0.40% at 9,940.0p.