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International Flavors & Fragrances to acquire Frutarom for $7.1bn

FBR Staff Writer Published 08 May 2018

US firm International Flavors & Fragrances (IFF) has agreed to acquire Israel-based ingredient producer Frutarom for nearly $7.1bn in a cash and stock deal.

As per the transaction terms, shareholders of Frutarom will be paid $71.19 in cash and will also be issued 0.249 of IFF shares in exchange of each Frutarom shares they hold.

The transaction amount includes the assumption of Frutarom’s net debt.

Frutarom, which manufactures flavors, savory solutions and natural ingredients, boasts of production and development centers across six continents.

It sells more than 70,000 products in over 150 countries with focus mainly on natural products, which constitute over 75% of its sales.

IFF chairman and CEO Andreas Fibig said: “Frutarom has an extremely attractive product portfolio, including broad expertise in naturals and diverse adjacencies with capabilities beyond our core taste and scent businesses.

“It also has significant exposure to complementary and fast-growing small- and mid-sized customers. By combining our deep R&D expertise with Frutarom’s, we are offering our customers a broader range of solutions and accelerating our growth strategy.”

IFF, on the other hand, manufactures flavors and fragrances used in food products, sweet goods and beverages.

The US-based company said that the transaction will speed up its Vision 2020 strategy to create a leading player in the world in taste, scent and nutrition.

Both IFF and Frutarom in a joint statement, said that their combination is expected to result in further exposure to rapidly growing end markets and an improved platform to deliver profitable growth that is sustainable.

Frutarom president and CEO Ori Yehudai said: “Today marks the culmination of a decades-long vision to become a global leader in taste and health.

“This combination provides great opportunities for both our dedicated employees and highly valued customers who will enjoy our combined technologies and global reach while maximizing value for our shareholders.”

The transaction, which has been approved unanimously by the boards of directors of the two ingredient companies, is anticipated to be completed in six to nine months. It will be subject to approval by shareholders of Frutarom shareholders along with receipt of relevant regulatory approvals and meeting of other customary closing conditions.

Image: International Flavors and Fragrances headquarters in New York City. Photo: courtesy of Americasroof/Wikipedia.org.