IFF, Dupont Merger Is Worth $26.2 Billion; Creates $45.4B Company

Paving way for a new consumer giant valued more than $45 billion, International Flavors & Fragrances (IFF) announced it is taking over DuPont’s Nutrition & Biosciences (N&B) on a $26.2 billion deal.

New York-based IFF is into flavors and fragrances. DuPont is a U.S chemical giant, Reuters reported.

Thanks to complementary portfolios, the IFF expects leadership positions across market segments such as texture, nutrition, cultures, enzymes, scent, taste, soy proteins, and probiotics.

The merger of IFF and N&B is expected to create a global leader in high-value ingredients and solutions for home, food, beverage, personal care, health, and wellness markets, according to a press release.

After the merger, IFF Chief Executive Officer Andreas Fibig will lead the company and also serve as the head of the board.

Under the deal DuPont shareholders will own 55.4 percent of the shares of the new company and IFF shareholders will get 44.6 percent shares, per IFF statement. DuPont will also get a one-time cash payment of $7.3 billion after the deal’s closure, IFF added.

Fibig said the merger will create leading ingredients and solutions provider with broader capabilities to meet customer demands.

After the deal, IFF expects cost savings of about $300 million on a run-rate basis by the end of the third year.

The deal will be executed using a tax-efficient structure called a Reverse Morris Trust, IFF said. This enables a company to reduce a big tax bill by spinning off a unit proposed for divestment while merging it with another company.

The growing market of fragrances

IFF chief Andreas Fibig has been on record about the strong demand growth for fragrances in markets such as Brazil, China, and India, per CNBC report.

DuPont Executive Chairman Ed Breen said it conducted a very “thorough process and led to the selection of IFF as the preferred strategic partner for N&B.”

The deal also aims at higher global reach and enhanced capabilities to offer innovative solutions to meet increasing consumer preferences in areas of natural, healthier, and “better for you” products, the statement added.

“Our expertise together with IFF will best position to address customer needs and redefine our industry,” per N&B President, Matthias Heinzel.

Morgan Stanley and Credit Suisse served as advisers of the deal.

For IFF, the top competitors include Givaudan, Sensient Technologies, Symrise, ADM, Kerry, Döhler, Robertet, Firmenich, and LorAnn Oils.

The IFF stock was down 0.4 percent on December 13, per Yahoo Finance. The two companies are expected to hold a joint conference call Monday, at 7:30 am ET to discuss the deal’s details.