Web Date: May 22, 2012
DSM Will Acquire Ocean Nutrition Canada
Dutch chemical firm DSM will spend about $530 million to acquire Ocean Nutrition Canada, a Canadian firm that calls itself the world’s largest supplier of omega-3 fatty acids to the dietary supplement and food manufacturing markets.
DSM says the acquisition is the fifth purchase it has made in the nutrition field since September 2010, when it announced a new corporate strategy to expand in the health, nutrition, and industrial materials markets. The largest of these deals was last year’s purchase of Martek, a producer of nutritional fatty acids via algal fermentation, for $1.1 billion.
Founded in 1997, Ocean Nutrition derives the omega-3 fatty acids eicosapentaenoic acid (EPA) and docosahexaenoic acid (DHA) from oil obtained mostly from anchovy fish. DSM expects the firm to have sales this year of $185 million.
DSM says the purchase will strengthen its newly created nutritional lipids business by adding fish-oil-derived fatty acids to Martek’s fermentation-derived DHA and arachidonic acid. Although Martek and Ocean Nutrition both offer DHA, DSM says the fish oil and fermentation products are sold at different prices and don’t compete. Regardless of the source, the fatty acids are marketed as good for human eye, brain, and heart health.
German chemical giant BASF is also pursuing the nutritional fatty acids market. Earlier this month it acquired Equateq, a Scottish producer of highly concentrated EPA and DHA extracted from marine, algal, and botanical sources. And late last year BASF’s plant science unit signed an agreement with Cargill to codevelop a new version of canola oil containing EPA and DHA.
Both chemical firms are pursuing what they say is a fast-growing market for omega-3 fatty acids in nutrition and health products. Ocean Nutrition, for example, has grown by nearly 20% annually on average for the past five years, according to DSM. Omega-3 fatty acids “have developed into a major nutrition ingredient category, based on solid science and well-recognized health benefits,” says Stephan B. Tanda, the member of DSM’s managing board responsible for its nutrition business.
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