CSM, the world's largest bakery products supplier, announced plans to divest its bakery supplies businesses to focus on the more profitable bio-ingredients divisions.
CSM’s bakery supplies business in North America and Europe, which has annual revenues of about $3.15 billion, was hit hard in recent years by weak consumer spending and high prices for key ingredients such as wheat and sugar.
The Dutch group plans to use the sale proceeds to support growth in its more profitable Purac and Caravan Ingredients businesses. Caravan Ingredients produces bakery ingredients such as icings and fillings, while Purac makes lactic acid, which is used in products such as salad dressings, beverages and household detergents.
In addition, the proceeds will help pay down debt and distribute money to shareholders.
Potential buyers include Mexico's Grupo Bimbo, Swiss-based specialty baker Aryzta and Belgian bakery group Puratos, as well as private equity firms, according to Reuters.
CSM expects to have made significant progress with the divestment by early 2013.