Goodman Fielder announces sale of Leiner Davis Gelatin
Goodman Fielder Limited (GMF) has entered into a conditional agreement to sell its global edible gelatin business, Leiner Davis Gelatin, to a German-based gelatin company, DGF Stoess AG, for US$170 million (A$310 million).
The sale, which will make DGF Stoess AG, the leading global producer of gelatin, is subject to regulatory approval, including anti-trust review in the United States.
The Chief Executive of Goodman Fielder, Mr David Hearn, said the sale of Leiner Davis is consistent with the objectives of the group-wide strategic review to be announced in early March.
Mr Hearn also said the sale of Leiner Davis will provide benefits to everyone involved in the transaction: Goodman Fielder, DGF Stoess AG, and Leiner Davis.
"The sale of Leiner Davis is a good outcome for Goodman Fielder because it will simplify the business and allow us to focus on other opportunities to accelerate operating performance and improve returns to shareholders," Mr Hearn said.
"The sale proceeds will also facilitate a new approach to capital management that Goodman Fielder will announce in the next few weeks as part of its group-wide strategic review.
"It is a good outcome for DGF Stoess AG, which sells gelatin under the GELITA brand internationally, because the acquisition will extend their geographic and product range which is currently focused in the northern hemisphere.
"Leiner Davis will also benefit by becoming part of a very focused global DGF gelatin business. This will provide bigger and new opportunities for employees."
Mr Hearn also announced that Goodman Fielder plans to sell its specialty ingredients business, Germantown, in the final phase of its program to completely exit its international ingredients operations.
"Following strong, unsolicited expressions of interest from many potential buyers in the last 12-18 months, Goodman Fielder has decided to sell its Germantown specialty ingredients business through public auction later this year," Mr Hearn said.
"Germantown is the leading value-added speciality ingredients business in the America's and Asia Pacific region and offers unique technology and market positions for potential owners."
The Leiner Davis and Germantown announcements follow the sale of Starch Australasia Limited to US-based starch company, Penford Corporation, in August last year.
Leiner Davis has production sites in Australia, New Zealand, South Africa, the United States, Mexico, Argentina, and Brazil.
The company employs approximately 1,000 people and makes edible gelatin from beef and pork skin in BSE free countries. More details about the company are on its web site (www.gelatin.com).
DGF Stoess AG is a private company based in Germany. It employs 1,900 people world-wide and will have a 30 per cent share of the global gelatin market after the LDG acquisition. More details about the company are on its web site (www.dgfstoess.com).
Germantown has production sites in Australia, New Zealand, the United States, Canada, Mexico and Brazil. It employs 270 people. More details about the company are on its web site (www.germantwn.com).
Source: Goodman Fielder Limited