Dive Brief:
- Louis Dreyfus is acquiring German chemicals manufacturer BASF’s Food and Health Performance Ingredients Business, according to a joint statement from the companies. Financial terms of the deal were not disclosed.
- The BASF division manufactures plant-based ingredients and emulsifiers for food formulators. The transaction includes a production and R&D facility in Germany, along with three other labs. As part of the deal, 300 BASF employees will transfer to Louis Dreyfus’ operations.
- Producers in the food space continue to expand their portfolios as consumers seek healthier ingredients. Acquisitions help companies, such as Louis Dreyfus, add more offerings to their portfolios, making their businesses more attractive to customers.
Dive Insight:
Louis Dreyfus, a major player in the food ingredients and agriculture marketplace, contends the new purchase will help grow its global reach in the plant-based space. In the press release, the company pointed to BASF’s portfolio of oils, fats, glycerin and lecithin as key assets in the deal.
“We see strong potential to accelerate LDC’s evolution from reliable raw material provider to trusted solutions advisor as well, partnering our global customers to develop attractive applications for bakery & confectionary, non-dairy, instant foods, personal care and healthcare,” said James Zhou, chief commercial officer at Louis Dreyfus.
For BASF, the sale gives the company room to focus on growing other areas of its business. The company said its plant-based unit is no longer a “strategic focus area” and has “limited synergies” within its operations.
“We remain committed to leveraging our core product platforms and expanding our business in key areas such as vitamins, carotenoids and feed enzymes,” Michael Heinz, a member of BASF’s board of executive directors, said in a statement.
The plant-based meat segment has struggled in recent years, with companies like Beyond Meat and Impossible Foods cutting jobs, tweaking their marketing strategies and prioritizing innovation. BASF’s divestiture could help it improve cash flow by abandoning a struggling category.
In recent years, Louis Dreyfus has increased its presence in the protein ingredients space. Last summer, the Netherlands-based company formed a dedicated business unit focused on pulses such as beans and lentils. Earlier in 2024, the processor announced plans to build a pea protein facility in Canada.