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DSM Now Said to Be in Evonik’s Crosshairs

19.05.2015 -

First Clariant, now DSM is rumored to be in the crosshairs of German chemical producer Evonik, which appears to be in the market for a major acquisition.

Evonik is said to be in talks with advisers about a deal for the Dutch group that would create a new chemicals player with sales of around €22 billion annually.

DSM is said to have turned thumbs down on an earlier offer by the German group, in part because it did not want to relocate headquarters across the River Rhine.

Market talk has it that Evonik would be willing to buy all of DSM, which has a market value of €9 billion. However its primary interest is said to concern the company's nutrition division, which makes food supplements.

Both companies are active in the saturated market for polyamide feedstock caprolactam, so that Evonik would find little interesting there. The two European chemical players also have been trying to diversify away from petrochemicals.

An Evonik spokeswoman told the news agency Bloomberg that there are no plans or considerations to buy DSM and that "there are no talks" between the two companies.

New York hedge fund Third Point, which has been hounding Dow Chemical of late, has also taken DSM into its line of vision, with fund chief Daniel Loeb highlighting the large potential value to be realized by splitting the materials and nutrition divisions and focusing on the latter.

Third Point is now one of DSM's largest shareholders, with a stake of more than 3%.

Bloomberg said DSM's chief executive CEO Feike Sijbesma and his board would have to support any bid because of the company's shareholder structure, which includes a foundation that has the right to issue shares if the group is the target of an unwanted approach.

Dutch analysts have commented that a takeover is unlikely to take place, as buying DSM as a whole is too big an acquisition for Evonik.

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