Corn Products International, Westchester, Ill., USA, is acquiring National Starch, a New Jersey-based producer of specialty starches, from AkzoNobel, The Netherlands, for $1.3 billion in cash. The acquisition, which has been approved by the boards of directors of both Corn Products and AkzoNobel, is expected to close in the third quarter, subject to customary regulatory approvals. The company expects to finance the transaction through cash, debt, and new equity.
National Starch had 2009 revenues of $1.2 billion from sales of specialty starches to both local and multinational customers in the papermaking, food, consumer, and industrial segments. It has 2,250 employees around the world and operates 11 plants in eight countries, including new geographies for Corn Products such as the U.K., Germany, Australia, and New Zealand. Corn Products has 8,000 employees and operations in 13 countries at 28 plants, including wholly owned businesses, affiliates, and alliances. In 2009, it reported net sales of $3.67 billion.
"Combining National Starch with Corn Products will create an ingredient solutions leader with nearly $5 billion in revenues," Ilene Gordon, chairman, president, and CEO of Corn Products noted. "The combined company will benefit from innovative technology, enhanced geographic scale, a broader and deeper product portfolio, and access to new market segments." The transaction is expected to generate cost synergies of at least $50 million, primarily from efficiencies in the areas of manufacturing, procurement, logistics, and general and administrative functions.
Gordon added that the acquisition gives Corn Products access to new markets such as Europe, and improves its scale and capabilities in many of its existing global locations. "We will be able to better serve our global customers with our enhanced geographic footprint and the addition of National Starch's technology. Further, we expect significant production efficiencies and cost synergies that will make us more competitive around the world.
"We are acquiring National Starch, not just because of its products and manufacturing assets, but also because of its experienced and dedicated people," Gordon added. "They bring to Corn Products exceptional know-how in ingredient development, solutions, and applications, along with proven marketing and customer service skills."
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