Darling Ingredients Inc. and Tessenderlo Group announced a definitive agreement to merge their collagen and gelatin businesses into a new company that will become the world’s largest collagen producer. The joint venture will combine Darling’s Rousselot brand with Tessenderlo’s PB Leiner portfolio, creating a combined annual revenue stream of roughly $1.5 billion and a total gelatin and collagen capacity of about 200,000 metric tons across 22 facilities worldwide. The transaction is structured so that Darling will hold an 85% ownership stake while Tessenderlo retains 15%, and the new entity will be operational once regulatory approvals are obtained.
The partnership is designed to accelerate growth in the health‑and‑wellness and nutrition markets. Darling already processes about 15% of the world’s animal by‑products and produces roughly 30% of global collagen, positioning it as a key player in the fast‑growing collagen market. By combining its core ingredients business with Tessenderlo’s established collagen portfolio, the joint venture will expand product offerings, increase scale, and create a platform for new functional collagen supplements, including a planned product line called Nextida.
Chief Executive Officer Randall C. Stuewe said the collaboration “will create new opportunities for growth while expanding options to enhance shareholder value.” He added that “collagen continues to be the fastest‑growing part of our food segment, and with PB Leiner’s talented team, assets and product portfolio, we are well positioned to accelerate innovation, scale and growth in this dynamic market.”
Darling’s Q3 2025 earnings provide context for the timing of the deal. The company reported revenue of $1.56 billion, beating analyst expectations by 3.3% while EPS of $0.12 fell short of the $0.25 consensus by 52%. The revenue beat was driven by strong performance in the core feed and food segments, which saw EBITDA rise to $174 million and $72 million respectively. Gross margins improved to 24.7% from 22.1% year‑over‑year, reflecting pricing power and a favorable mix shift. The EPS miss was largely attributed to challenges in the renewable diesel segment, where the Diamond Green Diesel joint venture posted a negative EBITDA of $3 million, a sharp decline from the prior year’s positive $39 million. These results underscore the company’s focus on its core ingredients business while navigating headwinds in its fuel segment.
The joint venture is expected to close in 2026 once regulatory approvals are secured. The deal expands Darling’s footprint beyond its traditional feed and fuel businesses, providing a strategic platform to capture the projected multi‑billion‑dollar collagen market and to diversify revenue streams. The partnership is positioned to deliver long‑term resilience and shareholder value by leveraging Darling’s circularity expertise and Tessenderlo’s global distribution network.
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