International Flavors and Fragrances (IFF) have entered into an agreement to merge with DuPont’s Nutrition & Biosciences (N&B) business, in a deal worth $26.2 billion.
The agreement will create a new combined company, which will now have an enterprise value of $45.4 billion. Under the terms of the deal – which will be executed through a reverse Morris trust transaction – DuPont shareholders will receive a 55.4% stake of the new company, while existing IFF shareholders will own 44.6%.
As a result of the transaction, the companies aim to become a global leader as a supplier of ingredients and solutions for the food and beverage industry, as well as in the home and personal care, and health and wellness markets.
The companies believe that the merger will expand its global reach and will be better equipped to respond to customer demand and an increase in consumer preferences for natural, healthier and ‘better-for-you’ products.
According to IFF, combining the businesses will enhance its portfolio offerings in categories such as taste, texture, nutrition, enzymes, soy proteins and probiotics.
“Together, we will create a leading ingredients and solutions provider with a broader set of capabilities to meet our customers’ evolving needs,” said IFF chairman and CEO Andreas Fibig.
Fibig added: “With highly complementary portfolios, we will have global scale and leading positions in key growth categories to capitalise on positive market trends, drive strong profitable growth for our shareholders and create opportunities for our employees.”
Ed Breen, executive chairman of DuPont, said: “DuPont and IFF share long and successful histories of customer-driven innovation and cultures of excellence, which is why I am confident that N&B will be well-positioned for its next phase of growth.
“We conducted a very thorough process leading us to the selection of IFF as the preferred strategic partner for N&B. I am excited about the future of the new company and all the opportunities it has for long-term value creation.”
Following the transaction, Andreas Fibig will remain as chairman of the board and will continue to serve as CEO. The new company’s board of directors will consist of seven current IFF directors and six DuPont director appointees, including DuPont executive chairman Ed Breen.
Upon completion of the transaction, DuPont will receive a one-time $7.3 billion special cash payment, subject to certain adjustments.
The deal is expected to close by the end of the first quarter of 2021, subject to approval by IFF shareholders and other customary closing conditions.
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