DMV-Fonterra Excipients To Buy DOMO-pharma Business

DMV-Fonterra Excipients, the 50/50 joint venture between Royal FrieslandCampina and Fonterra for pharmaceutical excipients, has reported to buy the activities of FrieslandCampina Domo in pharmaceutical lactose as per 1 March 2010.

This will further strengthen the knowledge base, sales network, sourcing and R&D capability. This, in turn, will improve the ability to better serve worldwide pharmaceutical customers in providing non-active ingredients for medicines, such as tablets and inhalation concepts. The new combination will have an annual turnover of approximately EUR120m, said the company.

The transaction brings together two companies with more than 100 years of experience in supplying the pharmaceutical industry. Both have built up their own customer base, which they serve from their individual production facilities.

DMV-Fonterra Excipients sources its products in Europe and New Zealand, while FrieslandCampina Domo-Pharma sources its products in Europe. They were involved to develop inhalation grade lactose, which is used for inhalation medicines.

Long-term synergies will be achieved by improving the shared base of the two companies. This includes the core technology and experience in producing pharmaceutical lactose, the shared knowledge base needed for innovations, formulations and applications, and the shared expertise in dedicated quality systems applicable to the production of pharmaceutical ingredients. The integration will create a broader base for future investments to better serve customer needs.

The total value of the transaction is EUR 52.5m, which will be equally divided between both joint venture partners. The transaction concerns the formulas, marketing activities, sales and distribution channels and use of the Domo name for pharmaceutical excipients.