Eridania Beghin-Say plans split into four independent companies

by Emily Wilson
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Eridania Beghin-Say, a world leader in sugar, starch and oilseed processing, will be split into four independent, publicly traded companies under a demerger plan announced recently by the company's board of directors.

The demerger, expected to be completed by July 2, will stimulate the growth of the individual companies by creating more focused and motivated management, the company said.

Under the plan approved by the board of directors and first proposed last November, Eridania Beghin-Say will be split into the following groups:

·Sugar and Derivatives, headed by Jerome de Pelleport, currently chief executive officer of Ceresucre, which coordinates the group's sugar activities. In fiscal 1999, Ceresucre produced 2.5 million tonnes of sugar, utilizing 19.1 million tonnes of sugar beets, as well as alcohol in France and Italy. Ceresucre operates 26 plants with 4,585 employees.

·Starch and Derivatives, led by Stefano Meloni, currently chairman and c.e.o. of Eridania Beghin-Say. Operating as Cerestar, the company processes starch for food and non-food applications from corn and wheat and derivative products including wheat gluten. The company has 15 plants and 3,956 employees.

·Oilseed Processing, Food Oil, Proteins and Lecithins, headed by Carl Hausmann, currently chairman of Central Soya Co., Cerestar USA and Eridania Beghin-Say America. The new company includes Central Soya and CanAmera, ranked No. 3 in North American oilseed processing, refining and packaging, and Cereol, the European leader in olive oil, sunflower oil and rapeseed oil processing. Central Soya and CanAmera operates 30 plants with 2,000 employees; Cereol operates 40 plants with 7,100 employees.

Animal Nutrition, headed by Wim Troost, chairman of the Provimi feed and premix group. Provimi in fiscal 1999 produced 1.92 million tonnes of animal feed and operates 66 plants with 5,197 employees.

Eridania Beghin-Say said the de-merger was justified by the limited synergies that exist among its different businesses.

In place of the existing shares in Eridania Beghin-Say, shareholders will receive shares in the four new companies that will be listed on the Paris Stock Exchange.

Eridania Beghin-Say said the estimated value of its shares, based on the valuation of each of the new companies, is approximately 120 euros (U.S.$112) per share. The cost of the demerger is estimated at 40 million to 50 million euros (U.S.$37.4 million to $46.7 million), or less than 2 euros per share.

The plan values Eridania Beghin-Say at 5,743 million euros, less the group's debt of 2,628 million euros.

Final terms of the demerger are to be determined at an April 27 board meeting and submitted to a shareholder's meeting June 25. Montedison S.p.A. of Italy controls 68% of Eridania Beghin-Say voting rights; the remainder is publicly owned.