Croda Selling Unit to Cargill

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Agricultural products company Cargill Inc. has agreed to buy most of Croda International Plc’s Performance Technologies and Industrial Chemicals unit, including one factory that produces esters for the lubricants industry.

The deal, announced Dec. 22, calls for Cargill to pay €915 million (U.S. $1.03 billion) in cash.  The Performance Technologies and Industrial Chemicals unit has three divisions: Energy Technologies, Industrial Chemicals and Smart Materials. Energy Technologies supplies esters and polyalkylene glycols used as base stocks in lubricants; rust preventatives for metalworking fluids and lubricants; viscosity and rheology improvers for lubes and greases; and friction modifiers, as well as other materials.

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Among the materials supplied by the Industrial Chemicals division are stearic acids, isostearic acids and oleic acids, all used in lubricants as well as other applications.

Many of Croda’s products are derived from plants, and Cargill – which is headquartered in Minnetonka, Minnesota, United States – said that accounted for much of its motivation in entering the deal.

“The bioindustrial space is a priority for Cargill, as we strive to support our customers with innovative, nature-based solutions that deliver real-world benefits,” said Colleen May, President of Cargill’s Bioindustrial business.

Cargill supplies foods for humans and animals, food ingredients and plant-derived products for industrial and consumer products including cosmetics and pharmaceuticals.

 Croda, which is based in Goole, United Kingdom, is keeping its Consumer Care and Life Sciences units – the latter supplies products for health care, crop protection and seed enhancement – and that it will use the sale proceeds to grow those operations.

Croda said Cargill will acquire five of its manufacturing sites, including its Gouda, Netherlands, facility, which produces esters and other materials. It also mentioned sites in Hull, U.K., and its Croda Sipo joint venture in Sichuan, China, provided an agreement can be reached with the Chinese partner. Neither company identified the other two sites that would be transferred.

The companies said they expect the deal to close in the summer of 2022.