DSM-Firmenich shares fell more than 5% on Monday after the company confirmed the sale of its animal nutrition and health business to private equity firm CVC for an enterprise value of €2.2 billion. The Dutch ingredients maker will retain a 20% stake in the business and launch a €500 million share buyback. Analysts at Barclays described the deal as bringing "long-needed closure" to a complex separation process but warned that the smaller-than-expected buyback could weigh on near-term sentiment.

Barclays noted that earnings-per-share dilution could take longer to unwind than investors had anticipated, while the lower buyback quantum reflects debt exiting with the animal nutrition unit. DSM-Firmenich expects to receive €1.2 billion at closing, including cash proceeds and debt transferred with the business, and will book a €1.9 billion non-cash impairment in 2025. The divestment simplifies the group and sharpens its focus on consumer nutrition, health and beauty.

While the transaction implies a valuation of around 7 times normalized EBITDA, broadly in line with recent media reports, analysts said a sustained re-rating would depend on improvement in underlying performance. Barclays added that upcoming quarterly results were likely to show only modest growth, an outcome "unlikely to excite the market," helping to explain the sharp sell-off in the stock.