DSM Firmenich (DSFIR) Status update summary

Transaction overview

• Announced divestment of Animal Nutrition & Health (ANH) to CVC Capital Partners for an enterprise value of EUR 2.2 billion, with EUR 1.2 billion proceeds at closing, a 20% retained stake, and a potential EUR 0.5 billion earn-out.

• ANH will be split into two standalone entities: Solutions Company and Essential Products (vitamins), with completion targeted by end of 2026.

• Transaction follows the earlier sale of Feed Enzymes activities, bringing the total ANH divestment value to EUR 3.7 billion.

• A long-term vitamin supply agreement was secured at favorable, cost-plus conditions, reducing exposure to market volatility and ensuring continuity in human and pet food applications.

• CVC will inject several hundred million euros in equity, and both parties will provide additional liquidity and backup financing, including a loan facility of up to EUR 450 million and potential additional liquidity support of up to EUR 115 million.

Financial impact and capital allocation

• Transaction results in a non-cash impairment of around EUR 1.9 billion, mainly related to goodwill and intangibles from the merger, with EUR 0.2 billion in cash tax, transaction, and separation costs in 2026.

• Expected to receive approximately EUR 1.2 billion after closing, including EUR 0.6 billion in net cash, EUR 0.5 billion in debt/liability transfers, and EUR 0.1 billion as a vendor loan note.

• Share buyback of EUR 500 million announced, in addition to the EUR 1 billion completed in 2025, to start in Q1 2026.

• Dividend maintained at EUR 2.50 per share, with a stable to preferably rising policy, reflecting confidence in future cash generation.

• CapEx intensity expected to decrease, moving towards 5% of sales as ANH exits the portfolio.

Strategic rationale and future outlook

• Divestment enables focus on core consumer business in nutrition, health, and beauty, marking the start of the 'accelerate phase.'

• No major M&A planned; focus is on organic growth and delivering on midterm strategic targets for core divisions.

• Restated financials for the consumer business will be published, reflecting the new structure and agreements.

• No negative stranded cost impact expected due to careful transition planning and service agreements.

• Ongoing communication with investors and analysts through scheduled calls and events.