Nutreco Buys BASF Animal Feed Units in 8 Countries

Dutch food group Nutreco said on Monday it had bought the animal feed units of BASF in eight countries, doubling its sales of pre-mix feeds and making it the No. 2 global player.

Nutreco did not state how much it had paid the German chemicals company for the units in Poland, Italy, the United States, United Kingdom, Mexico, Guatemala, China and Indonesia.

"Strategically, we believe this is a good acquisition as it provides revenue and costs synergies in Europe and in the United States, and gives Nutreco access to the upcoming markets in Latin America," said analysts at Rabo Securities in a note.

"We estimate that the acquisition price amounts to approximately 50 million euros," they added.

Nutreco said that after integration the acquired BASF businesses would contribute 10 million euros ($13.14 million) in operating profit in 2009 mainly due to cost synergies.

Nutreco last week reiterated its plans to grow by acquisition, and said it was in talks with several companies.

Juergen Steinemann, chief operating officer of Nutreco, said on Monday the world market for animal nutrition was growing by 2 to 3% per year but growth in China, Mexico, the United States, Poland and Indonesia outstripped this rate.

"Reinforcing our strongholds in these growth markets with BASF's operations will help us to gain momentum for further expansion in the America's and Asia," he said.

Vitamin-rich premixes are used in feed for poultry, cattle and pigs, and are mixed by farmers themselves into other feeds.