Fusion DSM with Firmenich in Food Ingredients – News Companies

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News Companies

11:00 today

The Dutch DSM will merge with the Swiss competitor Firmenich. This creates the DSM-Firmenich group, which is active in the nutrition, beauty and wellness markets, with a total annual turnover of more than € 11.5 billion. The companies expect to benefit from the merger especially in the areas of food, beverages and fragrances and flavors.

This was announced by the companies on Tuesday morning (31 May). The new DSM-Firmenich combination will officially become a Swiss company, listed on Euronext Amsterdam. The company will have two headquarters in Kaiseraugst and Maastricht and will have approximately 28,000 employees. Following the transaction, the DSM shareholders will soon own 65% of DSM-Firmenich, while the various owners of the private family business Firmenich will soon own 34.5%. Firmenich brings in 3.5 billion euros in cash in this stock trade to compensate for the difference in turnover. DSM has an annual turnover of € 7.3 billion in 2021, Firmenich € 4.35 billion. The merger is expected to be fully completed in the first half of 2023.

Attractive synergy potential
The boards of the two companies see significant financial and business benefits from the merger, especially between the fragrance, taste, texture and nutrition companies. According to DSM-Firmenich, this provides an annual ‘attractive synergy potential’ of € 350 million in adjusted EBITDA. The combination also expects an annual revenue increase of $ 500 million, which the two say will support a double-digit increase in earnings per share. shares.

DSM’s investors reacted enthusiastically to the merger news this morning as the DSM share rose sharply:

The DSM-Firmenich merger will further accelerate innovation for the industry and create new growth opportunities for customers, the two companies claim. The merger partners aim to form a ‘global partner’ for the food and beverage industry. To this end, DSM’s Food & Beverage and Firmenich’s Taste & Beyond activities will be merged (total sales EUR 2.7 billion). Firmenich’s perfumery and ingredient business will be bundled with DSM’s Personal Care & Aroma business (turnover € 3.3 billion). These new combined businesses will be joined by DSM’s Health, Nutrition & Care (€ 2.2 billion revenue) and Animal Nutrition & Health (€ 3.3 billion).

Sales materials department
In the wake of the major merger news, DSM today announced another major deal, namely the sale of the so-called Engineering Materials division. This branch, which aims to develop special materials for especially plant-based and circular solutions, will be sold for € 3.85 billion to investor Advent International and the German chemical group Lanxess. DSM Engineering Materials represented € 1.5 billion of DSM’s total annual net sales and € 334 million of adjusted EBITDA for 2021. DSM expects to receive approximately € 3.5 billion in cash on closing, less transaction costs and capital gains tax.

foodbusiness.nl

Throttle Erik

Eric de Lijster is the editor-in-chief of Foodbusiness.nl. As a farmer’s son, he has from an early age engaged in food production and coverage of the various food chains is a common thread throughout his journalistic career. He considers himself a generalist, but with a preference for economics, trends, markets and marketing.

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