DuPont’s nutrition division merges with IFF to create company valued at over $45bn

By Jane Byrne contact

- Last updated on GMT

© GettyImages
© GettyImages

Related tags: Kerry Group, cost synergies

A merger has been announced between International Flavors & Fragrance (IFF) and DuPont’s Nutrition & Biosciences (N&B) business. The combined company is valued at more than $45 billion.

The integration of the two businesses should generate attractive top-line growth and enhanced margins with further benefit from cost synergies and revenue growth opportunities, they said. 

A spokesperson for DuPont N&B told this publication:

“Together, IFF and DuPont N&B will create a category-defining, integrated value-added solutions partner, with an enhanced ability to deliver differentiated, integrated solutions to thousands of customers across a broad range of end markets. Each of our businesses have industry-leading technology, innovation and application capabilities. In the combined company, we can bring our science and creativity together to create new solutions that deliver differentiated innovation and faster growth for customers. This also applies to the animal nutrition business where we will be able to further develop our R&D expertise and solutions for the benefit of our customers.”

The deal is subject to approval by IFF shareholders and regulatory approvals. IFF said its largest shareholder, Winder Investments, has agreed to vote in favor of the transaction. 

The parties expect the deal to close by the end of the first quarter of 2021.

Under the terms of the agreement, which has been unanimously approved by both boards of directors, DuPont shareholders will own 55.4% of the shares of the new company and existing IFF shareholders will own 44.6%. DuPont will receive a one-time $7.3bn special cash payment, subject to certain adjustments, upon completion of the transaction.

Upon closing, the new company’s board of directors will consist of 13 directors: seven current IFF directors and six DuPont director appointees until the annual meeting in 2022, when there will be six directors from each company.

IFF CEO, Andreas Fibig, will lead the combined company; he will also continue to be chairman of the board.

Selection process

Ireland’s Kerry Group was also in talks with DuPont for its nutrition unit, according to Bloomberg.

Ed Breen, executive chairman of DuPont, said: “We conducted a very thorough process leading us to the selection of IFF as the preferred strategic partner for N&B.”

The merger will be executed using a tax-efficient structure called a Reverse Morris Trust, IFF said. Such transactions let a company avoid a big tax bill by spinning off a unit that it wants to divest and simultaneously merging it with another company, said Reuters.

The combined company said it is committed to maintaining an investment grade rating.

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