Cargill’s buy-out of Croda International’s performance technologies and industrial chemicals businesses has completed.
The £667 million deal includes the significant site at Hull, with more than 1,000 staff transferring to the US agri-giant at five locations.
A deal was agreed in December for the business unit, having been openly marketed previously following a strategic review announced just over a year ago.
Read more: £6m expansion plan outlined by high-growth East Yorkshire company named as top performer
It is described as an “excellent, world-leading business” but the East Yorkshire headquartered FTSE-listed firm has set out on a new path, focused on products for people instead of industrial operations.
Croda has recently announced major government-backed investments in vaccination provision in the UK and US.
Announcing the completion to the City, Steve Foots, chief executive of Croda, said: "This divestment accelerates Croda's transition to being a pure-play consumer care and life sciences company. We will redeploy capital and resources to scale our consumer, health and crop care technologies, helping to deliver consistent, superior sales growth and even stronger profit margins."
It comes 40 years on from a deal between the two for Hull’s rapeseed oil extraction plant, and is described as dramatically expanding Cargill’s bioindustrial footprint to "better serve industrial manufacturers searching for 'greener' ingredient solutions".
The buy-out involves additional laboratories alongside the key plants in the UK, Holland and China. The business units support automotive, polymer and food packaging applications.
In the year to June 30 last year it generated £382 million in sales for the £1.9 billion turnover Croda International, bringing an operating profit of £49 million.
The sale does not include Croda Sipo, a Chinese joint venture in which Croda has a 65 per cent shareholding. Bosses at Cowick Hall are continuing to discuss a potential acquisition of the joint venture partner’s stake to enable a further sale to Cargill as a wholly-onwed entity for £121 million.
Mr Foots had previously described Cargill as a “company with a distinguished history and strong values”. “Under its ownership, the divested business and our talented, hardworking employees can look forward to a bright future,” he said.
Cargill is one of the largest privately-owned firms in the States, with a 150 year legacy which began with food and agriculture, stretching across industry and finance - with a global reach.
When the deal was agreed just before Christmas, Colleen May, president of Cargill's bioindustrial business, said: "The bioindustrial space is a priority for Cargill, as we strive to support our customers with innovative, nature-based solutions that deliver real-world benefits. Combining our diverse, global supply chain and deep operational expertise with Croda's extensive industrial business capabilities and broad bio-based portfolio will spark a new wave of innovation and create tremendous value for our customers."
As well as the Stoneferry mill, in Cargill’s hands since 1985, the company is part of a joint venture with Associated British Foods in Frontier Agriculture, a Lincolnshire-headquartered crop production and grain marketing business. It uses Port of Hull, where an £8 million investment in new facilities has been recently made.
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