DSM, which has agreed to buy Martek Biosciences in a US$1.1bn deal, plans to expand the US firm’s “strong position” in infant formula worldwide, the Dutch food ingredients group’s chief executive said today (21 December).

The two companies announced this morning that they had a struck a deal that will see DSM buy Martek in an all-cash transaction worth $31.50 a share, or $1.09bn.

Speaking on a conference call today (21 December), DSM CEO and chairman Feike Sijbesma told reporters that the deal is a “very attractive and strategic opportunity” for the Dutch firm.

“The company already has a long-standing relationship with Martek as DSM supplies Martek with key materials, so culturally the fit is very good, we know the company,” Sijbesma said. “Further we have complimentary intellectual property that will enhance the competitiveness of the combined businesses going forward.”

Sijbesma said DSM would look to leverage its own international infrastructure to build on Martek’s “strong position” in infant formula.

“Martek is supplying to large infant formula and other food companies and of course we want to expand that and look to other companies we can supply to,” Sijbesma said. “Martek is mainly in the US, DSM has a global network in nutrition and obviously we will introduce the products of Martek globally. We will not mention names but in infant formula there are six big companies in the world dominating that market, but we want to expand that also into the food and beverage area.” 

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Looking forward, Sijbesma said DSM remained open to the possibility of further acquisitions.

“This will not be the last acquisition, more will follow. How big we don’t know but more will come. We have the cash to grow the company and this acquisition fits fully into the strategy of DSM,” Sijbesma said.

“We estimate that we can spend up to EUR2.5bn (US$3.28bn) without any problem,” he added. “If we want to we can lever that up a little bit more, maybe to around EUR2.5-EUR3bn. So there is still quite something left but we want to continue of course looking for acquisitions. This is the first one but there is a need to have the right time and to find the right target and that is not limited to 2011.”

DSM said it did not expect any job losses as a consequence of the Martek acquisition and said all key management will “come on board”.

Subject to customary conditions, the tender process is expected to close in February, and the transaction is expected to close in the first or second quarter of 2011.

DSM gained 3.9% to close at EUR42.60 on the Amsterdam Stock Exchange today.