Apollo asked to rejoin DSM-Firmenich’s auction as CVC bid stalls: report

DSM-Firmenich AG has invited Apollo Global Management to re-enter bidding for its animal nutrition and health division after unsuccessful negotiations with CVC Capital Partners.

The company initially aimed for a valuation of around €3 billion ($3.2 billion) for the division, but insiders suggest this target may not be achievable as negotiations continue.

Both CVC and Apollo have shown interest in restructuring the unit rather than an outright sale, citing declining margins due to increased competition in the Chinese market.

Further updates on the bidding process and deal structure are anticipated in the upcoming weeks if the discussions progress successfully.

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DSM-Firmenich AG (OTC:KDSKF) has extended an invitation to Apollo Global Management (NYSE:APO) to re-enter the bidding process for its animal nutrition and health division. This follows the company's unsuccessful attempt to finalize a buyout with CVC Capital Partners (OTC:CVCCF), as reported by Bloomberg News on Saturday.

After encountering valuation and structural disagreements with CVC, which remains the sole bidder, DSM-Firmenich is now looking to re-engage Apollo in the sale discussions. Initially, in July, DSM-Firmenich had identified both Apollo and CVC, along with Dutch competitor Nutreco, as primary bidders, aiming for a valuation near €3 billion ($3.2 billion) for the division, with completion of the deal anticipated by the end of 2025.

However, it appears this projected valuation may not be achieved according to insiders, as negotiations are still ongoing. DSM-Firmenich is keen on an outright sale of the entire division. In contrast, both CVC and Apollo have expressed interest in restructuring the unit or retaining a stake in the vitamin segment, due to the declining margins resulting from increased competition in the Chinese market.

If the discussions reach a successful conclusion, further details regarding the winning bidder and the deal structure are expected to emerge in the coming weeks.