SWITZERLAND – DSM-Firmenich has announced the sale of its MEG-3 fish oil business to KD Pharma Group, a prominent contract development and manufacturing organization specializing in pharmaceutical and nutritional lipids.
This strategic move aligns with DSM-Firmenich’s decision to refocus its lipids activities on its algae-based Omega-3 portfolio while maintaining a presence in the Early Life Nutrition markets with MEG-3 fish oils and powders.
As part of the transaction, DSM-Firmenich will secure a 29% minority stake in KD Pharma’s parent company, O³ Holding GmbH.
A DSM-Firmenich spokesperson explained, “Following our strategic portfolio review, we decided to de-prioritize certain business segments, including the MEG-3 business. This will allow us to sharpen our focus on our core strengths and deliver even greater value to our customers.”
The acquisition encompasses DSM-Firmenich’s MEG-3 business, which serves the food and beverage, dietary supplement, and pharmaceutical markets. It also includes Piura, Peru, and Mulgrave, Canada production facilities.
The MEG-3 business generated approximately €170 (US$184.87) million in sales in 2023 and employs around 200 people, all of whom will transfer to KD Pharma as part of the deal.
KD Pharma expressed enthusiasm about the acquisition, with a spokesperson stating, “We are excited to welcome the MEG-3 business and its talented team to the KD Pharma Group. This acquisition strengthens our position as a leading CDMO in the pharmaceutical and nutritional lipids space, and we look forward to building on the legacy of the MEG-3 brand.”
The transaction is slated for completion by the end of 2024, pending customary regulatory approvals. This strategic acquisition is timely, as the global omega-3 market is poised for significant growth.
It is projected to expand from US$3.9 billion in 2024 to US$7.4 billion by 2029, representing a compound annual growth rate (CAGR) of 13.5%.
DSM-Firmenich’s decision to divest the MEG-3 fish oil business follows a strategic portfolio review to prioritize core segments. While the company remains active in the nutritional lipids space, it is channeling its focus toward algae-based omega-3s.
Nevertheless, DSM-Firmenich will continue to provide MEG-3 fish oils for the Early Life Nutrition sector.
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