USA – The International Flavors & Fragrances (IFF) has entered into a definitive agreement to merge with DuPont’s Nutrition & Biosciences (N&B) business in a transaction that will create a US$45.4 billion company on an enterprise value basis.
Under the terms of the agreement, which according to a statement from the company has been unanimously approved by both Boards of Directors, DuPont shareholders will own 55.4% of the shares of the new company.
Existing IFF shareholders will own 44.6% in the combined company. The company will be headquartered in New York, USA.
The company claims that the combination of IFF and N&B creates a global leader in ingredients and solutions for global food & beverage, health & wellness as well as home & personal care markets.
Notably, the complementary portfolios will give the company leadership positions across key taste, texture, scent, nutrition, enzymes, cultures, soy proteins and probiotics categories.
Commenting on the deal, IFF Chairman and CEO, Andreas Fibig said, “The combination of IFF and N&B is a pivotal moment in our journey to lead our industry as an invaluable innovation and creative partner for our customers.
“Together, we will create a leading ingredients and solutions provider with a broader set of capabilities to meet our customers’ evolving needs.
“With highly complementary portfolios, we will have global scale and leading positions in key growth categories to capitalize on positive market trends, drive strong profitable growth for our shareholders and create opportunities for our employees.
“I have been impressed by N&B’s management team, which shares our culture and values, and we look forward to welcoming them to the IFF family.”
Ed Breen, Executive Chairman of DuPont added: “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.
“I am pleased to join the Board of the combined organization and remain involved in unlocking the potential of this new company.
“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.”
Governance and Management
The combined company’s Board will consist of directors from IFF and DuPont with Andreas Fibig serving as Chairman and CEO while Ed Breen will become Lead Independent Director starting June 1, 2021.
Upon closing, the new company’s Board of Directors will consist of 13 directors: 7 current IFF directors and 6 DuPont director appointees until the Annual Meeting in 2022, when there will be 6 directors from each company.
The ingredients suppliers believe that the combined company will have a strong financial profile, including pro forma revenues of more than US$11 billion based on fiscal year 2019 estimated results.
The merged entity is expected to realise revenue growth rate in the mid-single digits over the long-term with strong cash flow generation supporting an investment grade credit profile.
Upon completion of the transaction, DuPont will receive a one-time US$7.3 billion special cash payment, subject to certain adjustments.