Chr Hansen planning ingredients sale

- Last updated on GMT

Related tags: Chr hansen, Copenhagen

Denmark's Chr Hansen is considering breaking up into two separate
entities, one focused on food and pharmaceutical ingredients and
the other a pharmaceutical pure-play making allergy vaccines and
asthma treatments, activities activity currently handled by its
ALK-Abelló unit.

The Chr Hansen name, a strong brand in food ingredients ever since the company revolutionised the cheesemaking industry with the launch of a standardised rennet product 130 years ago, looks likely to go with the vaccines business.

But given that the majority holder of voting rights in Chr Hansen is the Lundbeck Foundation, which also holds a 73 per cent stake in Danish pharmaceutical company H Lundbeck A/S via its LFI subsidiary, the move is not surprising.

In a statement, the company confirmed that the pressure to maintain the Chr Hansen brand at the pharmaceuticals business came from the Lundbeck Foundation, which does not wish to be 'a long-term strategic shareholder of a controlling interest in an ingredients company'.

And in some respects, by becoming a pharmaceutical pure play Chr Hansen will hark back to the heritage associated with the company's founder Christian Hansen, who was a reknowned pharmacist.

The board of Chr Hansen has entered into an agreement with Carnegie Bank to look into the possibilities of divesting the ingredients business, subject to approval at a general meeting.

Chr Hansen said the rationale behind the sale would be to create 'an even stronger platform for a continued positive development of the [ingredients] business'. This would include all the cultures, enzymes, colours, flavours, seasonings, sweeteners, animal health, and human health activities and sites, including pharmaceutical excipients.

The business relationships with customers will not be affected while these activities are going on, stressed the company, which predicted that the process of finding a new owner could stretch well over the next year.

ALK-Abello recorded revenues of DKK 1.05 billion (€139m) in the fiscal year ended 30 September, helped by the launches of its SLITone product - for inducing tolerance to allergens - in Central and southern Europe, although high R&D costs meant that it made a net operating loss of DKK 58 million.

Chr Hansen CEO Erik Soerensen told​ that ALK-Abello should halve its loss to around DKK 30 million in the 2004-2005 fiscal year, and break even in 2005-2006. He also noted that the firm would concentrate on its in-house pipeline at present and has no plans to in-license new products, as despite having products on the market "we are not really a production company at prsent."

The market welcomed the news of the divestment this morning with the Chr Hansen's share price on the Copenhagen stock exchange rising more than 13 per cent to DKK 645 in mid-morning trading today.

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