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Acquisition criteria

DSM applies stringent strategic and financial criteria to any potential acquisition or partnership. In the screening process a first selection is made based on strategic fit. DSM’s financial criteria are applied to the resulting shortlist. Additionally, DSM will follow these guidelines:
  • A key strategic requirement is that the business or partner should add or increase a leadership position and should add value to DSM in terms of technological and/or market competencies.
  • DSM will look for opportunities to strengthen competencies and market positions in the other three strategic growth drivers: expansion in High Growth Economies, innovation potential and sustainability.
  • As DSM is fully committed to maintaining its single-A credit rating, the key financial criterion is that any acquisition should be cash EPS accretive from the beginning and should be supportive to all other financial targets.
  • In the exceptional case that a very attractive acquisition opportunity arises of a size that would put pressure on financial metrics, DSM may be willing to accept a temporary deviation from the credit metrics commensurate with its rating target. However, DSM believes that single-A ratings are the right place to be for the company to ensure sufficient financial and strategic flexibility at all times, and DSM would seek to manage its balance sheet and underlying financials after such an acquisition to allow us to re-align ratios with single-A ratings within a short period of time.

There are exceptions to the cash EPS criterion for potential acquisitions or partnerships; this requirement may for instance not be appropriate in the case of small innovative growth acquisitions.