One of the leading food & beverages industry player, International Flavors & Fragrances Inc., has recently announced its decision to acquire Frutarom. Apparently, the company will be buying the Israel-based flavors & fragrances market player in a cash & stock deal touted to be one of the largest in the rapidly consolidating food & flavors industry.
Including the cash and stock transaction, both the companies have valued the total deal at approximately USD 7.1 billion that also includes the assumption of net debt of Frutarom. According to reliable sources, this makes the deal the largest but one acquisition of an Israeli firm, behind Intel Corp’s last year purchase of Mobileye for USD 15 billion.
Sources reveal that by acquiring Frutarom, IFF will be tapping into the fastest growing market of natural food ingredients and will be competing directly with Givaudan for securing the industry’s top position. The deal vividly signals consolidation within the flavors & fragrances market after Givaudan showed interest in the French company Naturex, which Frutarom had shown takeover interest earlier, say sources.
Experts reveal that by collaborating with Frutarom, IFF is aiming to accelerate its Vision 2020 strategy to create a world leader in the scent, taste, and nutrition spheres. For the record, Frutarom operates in more than 150 countries and sells over 70,000 products including natural colors, beauty & health ingredients, and enzymes.
According to a joint statement, Frutarom’s shareholders, through this cash and stock combination deal will receive USD 71.19 in cash & 0.249 per share of IFF, representing a value of USD 106.25 per share.
Andreas Fibig, CEO, IFF, revealed that combining their R&D expertise with Frutarom will offer customers a broad spectrum of solutions, while accelerating their growth strategy. The purchase unites two firms with a large consumer base, capabilities, and global reach that would significantly result in additional exposure to the rapidly growing flavors & fragrances market.