Frutarom takeover gets the all-clear

By Noli Dinkovski

- Last updated on GMT

International Flavors & Fragrances’ $7.1bn (£5.26bn) takeover of Frutarom was announced in May
International Flavors & Fragrances’ $7.1bn (£5.26bn) takeover of Frutarom was announced in May

Related tags Flavor Frutarom acquisition Ingredients

The acquisition of Frutarom by fellow flavours giant International Flavors & Fragrances (IFF) has moved a step closer after receiving clearance from all relevant authorities around the world.

When it announced the $7.1bn (£5.26bn) deal in May, IFF said the takeover would enable it to offer customers a broader range of products, and allow both firms to make $145m in cost-savings by the end of the third full-year.

With all applicable antitrust and competition laws now satisfied, IFF said it was on-track to complete the deal by early October – ahead of its original plan.

“We are pleased that we’ve received our final antitrust clearance from Russia to proceed with our combination with Frutarom,”​ said IFF Chairman and chief executive Andreas Fibig.

“Building on our strong momentum – having obtained Frutarom shareholder approval and receiving all relevant antitrust clearance – we continue to make significant progress in our integration planning.

‘On-track to close the transaction’

“With great execution from our teams, we are on-track to close the transaction in early October – ahead of our original expectation.”

With a primary focus on natural ingredients, 70% of Frutarom’s sales are made to local and mid-size customers. In all, the Israeli-headquartered firm sells 70,000 products to 30,000 customers in 150 countries.

Under the terms of the deal, Ori Yehudai, president and chief executive of Frutarom, will serve as a strategic adviser supporting Fibig.

IFF will remain headquartered in New York, but will maintain a presence in Israel.

‘More exposure to fast-growing end-markets’

By combining with Frutarom, IFF said it would have “more ​exposure to fast-growing end-markets and an enhanced platform to deliver sustainable, profitable growth”​.

Earlier this year, Frutarom purchased UK-based Flavours & Essences for £14.75m​.

That deal was dwarfed by its acquisition of fellow Israeli firm Enzymotec last December. Having owned 19% of the company, Frutarom bought the remaining 81% for $210m (£158m).

Further consolidation in the flavourings sector came in March when Swiss giant Givaudan agreed to buy a 40.6% stake in French firm Naturex​ for €522m (£457m), and launch a cash tender offer for the remaining shares.

The successive takeovers have meant the global flavourings market is now dominated by four companies – IFF, Symrise, Givaudan and Firmenich.

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