CSM confectionery unit sale to close before 04

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CSM, the €2.8 billion Dutch bakery ingredients company, is still
hoping for a year end close on the sale of its confectionery unit,
that together with biochemicals, sugar and bakery supplies complete
the CSM stable.

Expected to sell for about €850 million the divestment announced in August is part of the firm's strategy to shed non-core activities to focus on core bakery supplies and sugar operations.

With the first round of bids now over, CSM has plucked a handful of companies to go through to the second round. According to media reports today, one of these firms, 3i, has pulled out of the running.

3i pulled out because the price for the confectionary firm was beyond what it was prepared to pay, say sources quoted in the reports.

Carving a bigger slice of European bakery ingredients market and a key factor in the ongoing drive to drill down into bakery supplies, CSM went on the acquisition trail last year buying in June the bakery operations of Coberco Dairy Foods, outside The Netherlands, that had an annual turnover of €11 million.

And in May, 9500 strong CSM reached an agreement to acquire the bakery ingredients business of Unilever in Hungary. The transaction, valued at €5.1 million ($5.9 million), took effect from 31 May.

In March this year the firm officially sealed the merger of UK bakery ingredients and finished foods firms, Arkady Craigmillar, Readi-Bake and Caravan Brill. CSM bought Readi-bake, a subsidiary of Country Home Bakers with annual sales of €22 million, last year for €28 million, giving the firm a step up into American-style cookies and sweet treats in the British market.

Last week CSM in a €24 million deal signed off its stake in non-core activity Koninklijke Nedalco, a natural alcohol supplier.

Jaap Vink, CSM chairman stressed recently that the biochemicals division in particular would benefit from the new focus.

This unit, which covers a wide range of products such as lactic acids and food preservatives sold mainly under the Purac brand, saw a slight drop in turnover for the first half of this year to €138.9 million.

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