German speciality chemicals firm Degussa has agreed to sell its food ingredients operations to US agribusiness firm Cargill for €540m (US$670m).

The transaction is still contingent on the approval of the Degussa supervisory board and the relevant regulatory authorities, Degussa said.

"Food ingredients are a strategically ideal fit for a strong global food industry player such as Cargill. We feel that we have placed these operations in good hands, and are very satisfied with the transaction as a whole," said Degussa's management board chairman Professor Utz-Hellmuth Felcht.

"This agreement marks a very significant step in Cargill's strategy of becoming a leading provider of specialty ingredients and ingredient systems to food and beverage companies globally," said Warren Staley, Cargill's chairman and chief executive officer. "This will be our largest acquisition since Cerestar in 2002 and greatly strengthens our range of texturant systems and flavouring capabilities."

After selling the Fruit Systems activities in early 2005, today the
Degussa food ingredients business consists of the texturant systems and flavours business lines.