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DSM to form global anti-infectives joint venture with Sinochem Group

Heerlen, NL, 17 Dec 2010 07:15 CET

Royal DSM N.V., the global Life Sciences and Materials Sciences company headquartered in the Netherlands, today announces that it has reached an agreement with Sinochem Group to form a 50/50 global joint venture for its business group DSM Anti-Infectives. The transaction is subject to receipt of regulatory approvals (including approvals from regulatory authorities in China) and customary clearances from competition authorities in the EU and elsewhere. In addition, DSM's works councils will be requested to render advice in relation to the proposed transaction.The parties anticipate closing to take place in Q2 2011. Upon closing, the transaction will have retro-active effect to 1 January 2011.

As part of the joint venture agreement, Sinochem Group will take a 50% equity interest in DSM Anti-Infectives for a total cash consideration of € 210 million on a cash and debt-free basis.

The joint venture will be headquartered in Hong Kong. Current DSM Anti-Infectives employees, in total around 2,000 people globally, will be part of the new entity. The joint venture will include all of the current DSM Anti-Infectives activities across the world.

The JV with Sinochem is fully in line with DSM’s stated strategy for its Pharma cluster: creating value via partnerships. The combination of DSM's strong global market position in anti-infectives and Sinochem's significant - sales - infrastructure presents exciting future growth opportunities through combined technologies and access to the fast growing Asian economies. DSM Anti-Infectives, the global leader in beta-lactam antibiotics, has successfully applied its highly innovative biotechnology knowledge to improve and transform its business.

Stephan Tanda, Member of the DSM Managing Board and responsible for the Pharma cluster, commented: “The intended joint venture with Sinochem Group is an important step for DSM and our anti-infectives business. This partnership will benefit from the strengths of both Sinochem and DSM and will allow us to grasp market opportunities in China and other high growth economies, in addition to securing European and American access to high quality products. Together with Sinochem Group we will accelerate the realization of this global joint venture’s growth strategy. I have every confidence in a successful partnership.”

Mr. Pan Zhengyi, Vice President of Sinochem Group, said: “The Chinese central government has the great initiative to promote seven key industries of strategic importance. Biotechnology is directly involved in four of these industries and related with the other three. The forming of this global joint venture is momentous for Sinochem with respect to its effort to build up its presence in biotech industry. It is also a strong testimony that Sinochem is ready to perform its social responsibility to save the energy consumption and reduce waste discharge by leveraging biotechnology. We have full confidence in DSM’s capability in terms of fermentation and biocatalytic conversion. The partnership will further promote the technical breakthrough in the anti-infectives sector and it is a strong force pushing Sinochem’s strategic development in the biochemical industry.”

Both companies are convinced that together they will be better able to capture the growth opportunities in China and other high growth economies, combining DSM’s proprietary technology position and global production footprint and Sinochem’s distribution and sales capabilities and global growth ambition in bio-pharmaceuticals. Further announcements on organization and management will be made at closing.

Additional information

Today DSM will hold a conference call for the media from 09.00 AM – 09.30 AM CET and a conference call for investors and analysts from 10.00 – 10.45 AM. Details on how to access these calls can be found on the DSM website, Also, more information can be found in the presentation via the link below.

Sinochem Group

Incorporated in 1950, Sinochem Group is one of China’s biggest central state-owned enterprises. Sinochem has five business segments including agricultural, energy, chemical (including pharmaceutical distribution), real estate and finance Sinochem has more than 200 subsidiaries and branches both in China and abroad, among which there are four listed companies, namely Sinochem International (SSE, 600500), SinoFert (HKEX, 00297), Franshion Properties (HKEX, 00817) and GMG. On June 1st, 2009, Sinochem made a major move to inject most of its assets into a shareholding entity, “Sinochem Corporation”. More than 40,000 employees emulate Sinochem’s spirit of exploration and innovation, adopt the mindset of “Creating Value, Pursuing Excellence” and try their utmost to enhance the corporate value and to build an iconic company worldwide. More information:

DSM Anti-Infectives

DSM Anti-Infectives is one of the world’s leading suppliers of active pharmaceutical ingredients (APIs), and the global market leader in ß-lactam antibiotics. Its leadership position in this biggest class of anti-infectives is based on its use of proprietary biotechnology. These processes provide DSM Anti-Infectives with a leadership position in terms of both cost and a significantly more favorable ECO footprint, reducing energy consumption and waste generation dramatically, compared to conventional technology.