International Flavors & Fragrances Inc (NYSE:IFF) announced plans to combine with the nutrition & biosciences unit of DuPont de Nemours Inc (NYSE:DD). The new entity will be valued at over $45 billion. As per the terms of the deal, the shareholders of DuPont will receive 55.4% of the shares in the new consumer giant. The existing shareholders of International Flavors will get 44.6% of the shares in the merged entity.
According to a communiqué from International Flavors, its board of directors has unanimously approved the deal. Winder Investments, the largest stakeholder in International Flavors, will support the merger deal. The increasing concerns of the high debt profile of International Flavors and the proposed merger with DuPont have sent the shares of International Flavors to lower by 8% on Monday.
Andreas Fibig heads the combined entity
Andreas Fibig, Chief Executive Officer of International Flavors, will manage the newly formed consumer giant. He will also continue to work as Chairman of the board. Ed Breen, Executive Chairman of DuPont, said the company has chosen to merge with International Flavors after a thorough process.
Commenting on the deal, Fibig said the company, along with DuPont, will create a consumer giant that engages in offering innovative solutions and ingredients to satisfy the needs of customers. The new entity will use the Reverse Morris Trust, a tax-efficient structure. It helps to reduce the tax burden. Following the merger, International Flavors expects to achieve cost savings of $300 million by the end of the third year.
The global market for plant-based meat is expected to reach $140 billion in the next decade. Therefore, it offers excellent opportunities for the merged entity going forward. Credit Suisse and Morgan Stanley have arranged the debt financing for both International Flavors and DuPont.
According to the information shared by Bloomberg, Kerry Group, based in Ireland has been in discussions with DuPont to acquire the nutrition business. But, Kerry Group missed the deal with DuPont.
The product line of International Flavors
International Flavors is engaged in the production and supply of fragrances and flavors for use in the beverage, food, household products, and personal care products. Its business segments include Frutarom, Scent, and Taste.