Croda's sells German business for £55m

The natural chemicals group, based in Snaith, East Yorkshire, is to sell the Emmerich site and the business to KLK Emmerich GmbH, a subsidiary of the KLK Group (Kuala Lumpur Kepong Berhad).

Croda said the deal largely completes the restructuring programme to re-position its oleochemical operations since the acquisition of Uniqema in 2006.

KLK will assume pension obligations of about €35.2m and then €25.3 million will change hands at completion.

The Emmerich site produces fatty acids and glycerine, most of which were sold through Croda's industrial specialities market. Croda had acquired the Emmerich site as part of the Uniqema acquisition.

The business had sales of 80m on a pro-forma basis and an operating loss of 2.1 million in 2009, with net operating assets of 37.7 million at 31 December, Croda said.

Completion of the deal is subject to German anti-trust clearance and Malaysian Central Bank approval.

The sums involved are subject to adjustment, Croda said. The Yorkshire firm will continue to supply and source some products to and from the business under normal third party commercial terms.

Proceeds of the sale will initially be used to reduce Croda's net debt which stood at 292.7 million at 31 March.