Nutreco Abandons Sale Process for Iberian Feed, Meat Assets

Nutreco NV (NUO), the maker of Skretting fish feed, abandoned efforts to sell its compound-feed and meat business in Spain and Portugal generating 1.4 billion euros ($1.9 billion) in sales after offers came up short.

Discussions had been held with several potential buyers, including private equity firms, before the divestment process ground to a halt, Chief Financial Officer Gosse Boon said in an interview today.

“The process took a bit longer than we expected, and we can only conclude that the parties interested were unwilling to put forward a value that was acceptable,” Boon said. “In due course, perhaps we will bring it back to the market. Time will tell.”

The Dutch company, based in Amersfoort, undertook a four-month sale process to find a buyer as it focuses on animal-nutrition and fish-feed products. Chief Executive Officer Knut Nesse is targeting growth in Brazil, Russia, southeast Asia and Africa for its mainstay products ranging from pigfeed to minerals that help reduce disease outbreaks.

Nutreco has appointed Javier Rodriguez Ceballos to lead the Iberian business, which is cash generative, with a plan in place to focus on growth opportunities including fresh packed and value-added poultry products. The Spanish market is improving, adding to the potential of the business, Boon said. All options were explored, including the potential for a joint venture, he said.

Shrimp Disease

The company reiterated earnings before interest, taxes and amortization in the first half will probably be “clearly higher” than the year-earlier period, driven by fish feed and the Iberian business that had been slated for sale. Animal nutrition results will be “slightly” higher, it said.

Boon said there are signs that the early mortality syndrome disease that has affected shrimp harvests in Asian markets such as China is now stabilizing. The substantial part of Nutreco’s business in China is fish, which is not affected, Boon said.

“We’re watching the situation, it seems to be bottoming out and that’s where we currently are,” the CFO said. “Our exposure worldwide is relatively limited.”

To contact the reporter on this story: Andrew Noel in London at anoel@bloomberg.net

To contact the editors responsible for this story: Simon Thiel at sthiel1@bloomberg.net Martijn van der Starre

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