DSM‑Firmenich’s decision to sell its Animal Nutrition & Health (ANH) division to private‑equity group CVC Capital Partners for an enterprise value of around €2.2 billion marks a strategically important moment in the evolving investibility of the animal health sector.
The deal is the company’s clearest statement yet that commoditised feed inputs like vitamins, amino acids, premixes have become increasingly exposed to global supply gluts and weaker feed demand – conditions have intensified earnings volatility for major suppliers. Exiting most of this portfolio allows DSM‑Firmenich to streamline its balance sheet and sharpen its focus on higher‑growth consumer markets such as human nutrition, health and beauty.
CEO Dimitri de Vreeze framed the divestment as a milestone in repositioning the company away from cyclical agribusiness exposure.
“Today marks the final step in that journey,” he said. “This transaction reflects our commitment to accelerating our growth and creating long‑term value. At the same time, it opens an exciting new chapter for ANH, enabling it to thrive and realize its full potential.”
Specialist investors still see value
CVC’s move to carve ANH into two standalone businesses – the “Solutions Company” and the “Essential Products Company” – demonstrates that specialist investors continue to see significant value‑creation opportunities in animal nutrition, despite recent headwinds of rising input costs.
For CVC, the attraction appears to lie in the differentiation between higher‑margin solutions and scale‑driven essential feed ingredients.
Steven Buyse, managing partner at CVC, said the firm sees both sides as strong investment cases.“This transaction represents a unique opportunity to create two new leading companies in the animal nutrition & health space,” he said. “The Solutions Company will continue to drive innovation and efficiency in animal farming… while the Essential Products Company will be built as a resilient global leader in essential feed, food and fragrance ingredients.”
The move underscores that while commoditised feed ingredients face cyclical pressure, investors with operational expertise and a long‑term view still see potential for margin expansion, consolidation and supply‑chain optimisation.
DSM‑Firmenich wants exposure – just not the volatility
Crucially, DSM‑Firmenich is not walking away from the sector entirely. Its decision to retain a 20% equity stake, alongside a long‑term vitamin supply agreement, signals it does not see structural decline in global demand for animal protein.
Instead, the structure suggests a preference for indirect, lower‑risk exposure while redeploying capital toward consumer‑facing growth areas.
This approach reflects that animal protein demand is projected to remain resilient globally, but input categories remain highly sensitive to oversupply and commodity cycles.By holding a minority stake, therefore, DSM‑Firmenich keeps upside exposure while protecting its earnings from volatility.
A ‘barbell’ investibility model defines the future of animal health
The transaction highlights a broader pattern emerging across the animal nutrition and health landscape: a ‘barbell’ model of investment. On one side, feed inputs that are capital‑intensive, margin‑compressed and vulnerable to global supply swings. On the other: high‑value, tech‑enabled or specialty solutions such as precision nutrition, animal health additives, diagnostics, data‑driven performance tools that continue to attract strong strategic and private equity interest.
DSM‑Firmenich’s decision to reduce exposure to the volatile end of the barbell, and CVC’s decision to double down on both ends, captures this contrast clearly.
The transaction is expected to close at the end of 2026, subject to regulatory review and the full separation of the new companies.
