Croda completes overhaul with £52m sale of German division

Croda, based in Snaith in East Yorkshire, said it will use the proceeds to reduce net debt, which stood at 292.7m on March 31. It is selling the business to Malaysian oil palm plantation group Kuala Lumpur Kepong Berhad (KLK). The German business was originally owned by Uniqema.

Under the terms of the deal, KLK will assume the retirement benefit obligations of about 30.2m related to the business.

KLK is one of the world's largest makers of palm-based natural

chemicals, such as fatty acids and glycerine.

Croda said it expects the deal to marginally add to its earnings for the year ending December 31.

Croda's German business reported an adjusted operating loss of 2.1m on sales of 80m in 2009, and had net operating assets of 37.7m at the end of last year. Following the sale of the German operation, Croda said it has no plans for any immediate acquisitions.

The disposal fits in with the company's decision to dispose of lower margin businesses following the 410m Uniqema acquisition, which was a major step change in the group's development.

Croda specialises in natural chemicals for anti-wrinkle creams and other skin care products.

Croda, which supplies ingredients to skin care and cosmetics companies such as L'Oreal, Chanel, Clarins, Estee Lauder, Boots and Procter and Gamble, also announced the appointment of ex-Unilever chief legal officer Steve Williams and Steve Foots, president of Croda Europe, to its board.