Roche/DSM Vitamins Unit Posts Decreased Sales

Roche/DSM Vitamins Unit Posts Decreased Sales

BASEL, Switzerland--Although Roche and DSM signeda contract Feb. 10 for the sale of Roche's Vitamins and Fine Chemicals Unit toDSM come mid-2003, Roche reported the division's year-end figures for the fiscalyear (FY02).

The Vitamins and Fine Chemicals Unit had sales of approximatelyUS$2.6 billion, a decrease of 4 percent compared to FY01. The factorscontributing to this weakened performance included unfavorable exchange rates ofthe U.S. dollar relative to the Swiss franc, restructuring and other one-timecosts, and lower prices for some products. However, the volume of products soldby the division increased 7 percent, especially among new products.

The contract between Roche and DSM is subject to approval byanti-trust authorities, but once approved, DSM will pay US$2.1 billion to Roche.This will be divided between cash and approximately US$110 million worth of DSMstock. This final price is lower than the September transaction value of US$2.5billion, a number affected by a continued slowdown of the world's economies andthe weakening value between the U.S. dollar and the Swiss franc. As announcedearlier, current and any potential liabilities associated with the ongoingvitamin price-fixing case will be handled by Roche. According to the companies,this transaction will help DSM focus more on becoming a specialties company,while it will help Roche focus on its high-tech sectors.