Press release

DSM and Sinochem Group establish global anti-infectives joint venture

Heerlen, NL, 31 Aug 2011 11:45 CEST

Royal DSM, the global Life Sciences and Materials Sciences company, announces today that it has established the 50/50 global joint venture for its business group DSM Anti-Infectives with Sinochem Group. All applicable regulatory approvals and customary clearances from competition authorities have been received. The agreement to form the joint venture was announced in December 2010.

As part of the agreement to form the joint venture, Sinochem Group has taken a 50% equity interest in the business group for a total cash consideration of €210 million on a cash and debt-free basis with 1 January 2011 as effective date. Sinochem Group and DSM share on a 50/50 basis the cash in- and outflow of DSM Anti-Infectives as from that date. On balance DSM will report a book profit of approximately €45 million after tax as a result of this transaction in Q3 2011 as an exceptional item.

The joint venture will be headquartered in Hong Kong. Current DSM Anti-Infectives employees, in total around 2,000 people globally, are part of the new group, to be named DSM Sinochem Pharmaceuticals Limited. The joint venture includes all of the current DSM Anti-Infectives activities across the world.

Stefan Doboczky, Member of the Managing Board of Royal DSM, and CEO of DSM Sinochem Pharmaceuticals commented: “The establishment of this joint venture with Sinochem is fully in line with DSM’s stated strategy for its Pharma cluster: creating value via partnerships, but also further strengthens DSM’s position in China. The combination of DSM's strong global market position in anti-infectives and Sinochem's significant global market capability, presents exciting future growth opportunities through combined technologies and access to customers, especially in the fast growing Asian economies.”

Mr. Pan Zhengyi, Vice President of Sinochem Group said: “The establishment of DSM Sinochem Pharmaceuticals Limited will accelerate the application of its innovative biotechnology knowledge to improve and transform its business, so as to consolidate and enhance its global leading position in the field of anti-infectives. At the same time, we are confident that this is a very positive step for Sinochem and DSM in their respective ambition to apply biotechnology broadly, to help the advancement of human health with environmentally sustainable processes.”

Both companies are convinced that together they will be better able to grow top and bottom line by capturing the growth opportunities in China and other high growth economies, combining DSM’s proprietary technology position and global production footprint and Sinochem’s strong position in its core businesses together with its global growth ambition in the bio-industry.

Organization and management

The present global DSM Anti-Infectives organization and management will form the backbone of DSM Sinochem Pharmaceuticals’ organization and management. The customer oriented structure of DSM Anti-Infectives with full service units in Latin America, Europe, Egypt, India and China will be the base of servicing the DSM Sinochem Pharmaceuticals customers. The board of DSM Sinochem Pharmaceuticals shall have six members of whom three will be appointed by DSM and three by Sinochem.

For more information

Lieke de Jong-Tops

Senior Communications Manager
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Dave Huizing

Vice President Investor Relations
+31 45 578 2864

Media Relations

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Investor Relations

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