PAI, the European firm that for some years has been consolidating its position in the food sector, will pay €1.1 billion for the number one culture maker.
In a statement the equity firm said that current executive vice president Lars V. Frederiksen has already taken over the role of CEO from Erik Soerensen.
Chr. Hansen came up for sale in November last year after its major stakeholder, the Lundbeck Foundation, decided to pull away from the ingredients slice of the company to focus on the pharmaceutical unit.
In addition to cultures, the Danish firm has strong market positions in natural colours (number one), enzymes and flavours.
At €450 million last year the ingredients unit contributed the majority of revenue to the group, compared to the €141 million in revenue from the pharmaceutical unit, ALK-Abello, that focuses on allergy treatment and asthma prevention products.
Rumours floating around at the time of sale had suggested that DSM, the Dutch chemicals group, had entered the frame to bid for the ingredients unit. Successsful Irish food group Kerry was also a strong contender.
But the board of directors at Chr. Hansen Holding plumped for PAI partners on the basis of "an overall assessment of price, terms and deliverability", claiming its offer is the "most attractive option to the shareholders."
PAI, that recently spun off natural ingredients firm Diana-Ingredients, has made a host of acquisitions in the food sector. Recent deals include the French dairy products company Yoplait, UK biscuits manufacturer United Biscuits for €2.8bn, and €555m for Panzani Lustucru, a pasta sauce specialist.
Diana-Ingredients, acquired in 1990, had been the only human food ingredients firm in the group's portfolio, prior to its sale, although in November 2002 PAI bought a 74 per cent slice in animal feed giant Provimi.
Providing opportunities for cash rich, ambitious firms, either within or external to the food industry, the roll call of ingredients players on the market keeps on growing, largely against the backdrop of increasing consolidation in the food industry.
The retailers are extending their reach across the globe, and ingredients suppliers are under severe pressure - notably through squeezed margins - to keep up with the pace and to deliver products at competitive prices. Consolidation and economies of scale are one of the only routes open to them.
Now the Chr Hansen sale is virtually complete, attention in the food ingredients industry will turn to the sale of Degussa's food ingredients' operations. Once again, Kerry is likely to be a key contender for the ingredients unit that pulled in sales of €527 million in 2003.