DSM Announces JV With Nenter to Produce Vitamin E

HEERLEN, Netherlands, January 29, 2019 /PRNewswire/ --

Royal DSM, a global science-based company in Nutrition, Health and Sustainable Living, today announced thatitintends to create a 75/25 joint venturewith Nenter & Co., Inc., which will includeallNenter'sproduction and related assets for Vitamin E.

In order to fulfill its future need for Vitamin E, DSM will acquire a 75% shareholding in the joint venture, for a cash consideration of about € 135 million, representing an EV/EBITDA multiple of roughly 6x based on the estimated 2019 EBITDA generated by Nenter's Vitamin E business.

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The joint venture will acquire and operate the Vitamin E production facilities in Jingzhou, Hubei, China and have a minority shareholding in Nenter's Shishou facility, also in Hubei, China. The joint venture will exclusively produce Vitamin E for DSM subject to existing supply agreements of Nenter, and there will be a profit share agreement in place between DSM and Nenter.

DSM will, together with the joint venture partner Nenter, upgrade and refurbish the facilities and improve the operational performance, to secure high-quality and sustainable supply of Vitamin E, while ensuring compliance with DSM's safety, health and sustainability standards.

Through this joint venture, DSM will enhance its Vitamin E position. The joint venture will provide DSM with cost-effective access to additional capacity allowing DSM to continue to grow organically in Vitamin E, which is an essential ingredient in DSM's animal nutrition premix solutions.

The joint venture will strengthen DSM's global supply chain footprint, enabling the company to offer locally produced Vitamin E in China and Asia Pacific, next to its facilities in Switzerland. This will support DSM's strategic actions to reduce its working capital requirements by simplifying its supply chain.

Vitamin E is well recognized and accepted as nature's most effective fat-soluble, chain-breaking antioxidant, protecting cellular membranes from being attacked by lipid peroxyl radicals. Although primarily known as an efficacious biological antioxidant, Vitamin E has more benefits, including maintenance of the structural integrity of all tissues and substantial contribution to optimum health and disease resistance of farm animals due to its modulating effects on the immune system.

The transaction is subject to several regulatory approvals and expected to close in Q2/Q3 2019. As of the date of gaining control DSM will consolidate the entity.

DSM - Bright Science. Brighter Living.

Royal DSM is a purpose-led global science-based company in Nutrition, Health and Sustainable Living. DSM is driving economic prosperity, environmental progress and social advances to create sustainable value for all stakeholders. DSM delivers innovative business solutions for human nutrition, animal nutrition, personal care and aroma, medical devices, green products and applications, and new mobility and connectivity. DSM and its associated companies deliver annual net sales of about €10 billion with approximately 23,000 employees. The company is listed on Euronext Amsterdam. More information can be found at http://www.dsm.com.

Forward-looking statements

This press release may contain forward-looking statements with respect to DSM's future (financial) performance and position. Such statements are based on current expectations, estimates and projections of DSM and information currently available to the company. DSM cautions readers that such statements involve certain risks and uncertainties that are difficult to predict and therefore it should be understood that many factors can cause actual performance and position to differ materially from these statements. DSM has no obligation to update the statements contained in this press release, unless required by law. The English language version of the press release is leading.

For more information:

DSM Media Relations
Herman Betten
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DSM Investor Relations
Dave Huizing
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