Sources told Bloomberg that Dutch chemical firm Royal DSM NV was in advanced talks to divest its caprolactam business. Two people with knowledge of the transaction said interested parties, including buyout firms and rivals, were in the process of preparing their detailed bids for the second round. They added that a deal worth over EUR 200 million or USD 270 million, could be announced before the year ends.

Royal DSM had been making caprolactam for over 60 years. The chemical is used in making plastics and car parts. However, the sources said prices had plunged because of the competition coming from manufacturers in China. According to a Bloomberg report, Chief Executive Officer Feike Sijbesma wanted to focus the company on manufacturing food ingredients and other materials. This would enable to company to get more profits.

Earlier, DSM had said it was in the process of reviewing bids for the merchant side of its caprolactam unit. The company did not confirm if they were selling the entire unit.