BP sells last slice of its nutrition arm: CINVen and Baring in dollars 450m deal

BP yesterday announced that it was selling the last substantial chunk of its nutrition businesses, completing a disposal programme announced at the depth of the group's crisis in 1992. Exclusive negotiations to sell four divisions, employing 5,800 people and turning over dollars 2bn ( pounds 1.5bn), are now taking place with CINVen and Baring Capital Investors. The price is believed to be about dollars 450m.

BP says the sale is not a management buyout. However the existing management, led by the managing director, Richard van Wijnbergen, will stay in place, and is likely to be offered an equity stake.

The businesses operate mainly in Western Europe from a headquarters in Boxmeer in the Netherlands. Feed and Animal Products is the largest supplier of feed in Europe, with strong positions in Spain, Benelux and France. It also produces poultry and pork products, and employs 3,000 people.

Agri Specialities, with a staff of 1,000, is the European leader in speciality feeds and milk replacers. Animal Breeding is the world leader in pig and poultry stock, and employs 500, while Aquaculture, with 1,300 staff, is one of the most important producers of salmon and trout feed, operating salmon farms in Canada and Chile.

BP moved into nutrition in 1975 and by 1992 its business was turning over dollars 5.5bn. That year the whole group ran into a crisis that forced the chairman, Bob Horton, to resign. His successor, David Simon, announced dollars 1bn in provisions, the slashing of 10 per cent of the workforce, and the first dividend cut since the First World War. Mr Simon also said he wanted to raise dollars 2bn from the 'managed exit' from a number of core businesses, of which the biggest was Nutrition.

Last year, the Consumer Foods division was sold to the US group Sara Lee, the Consumer Products division to a group backed by Legal and General, and Paragon Petfoods to Dalgety.

The group's overall disposal programme is now close to completion, and has raised more than it had hoped - pounds 3bn before yesterday's announcement.

The City believes BP is well on the road to recovery. Last month it announced pre-tax profits for 1993 of pounds 896m, compared with a pounds 352m loss in 1992. The company is now firmly based on petrochemicals, and Mr Simon said it would have to learn to live with a world in which a barrel of oil cost dollars 13 to dollars 14. He said BP intended to find another pounds 600m savings in the next three years.

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