International Flavors & Fragrances to merge with DuPont Inc’s nutrition & biosciences business for $26.2 billion

In a statement, International Flavors & Fragrances Inc stated, it will merge with DuPont Inc’s nutrition & bio-sciences unit in a deal worth $26.2 billion.

Under terms of the agreement, DuPont’s shareholders will get 55.4% of the shares in the new company while existing IFF shareholders will own 44.6%, said IFF in a statement.

IFF’s statement also mentioned that the deal has been unanimously approved by the boards of both companies.

DuPont will also receive a one-time cash payment of $7.3 billion after the successful closing of the deal, said IFF.

Andreas Fibig, IFF’s Chief Executive Officer, will head the combined company and will also continue to be the chairman of its board.

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

IFF creates fragrances and flavors and works with global brands to develop scents and tastes for products that are household names.

“Together, we will create a leading ingredients and solutions provider with a broader set of capabilities to meet our customers’ evolving needs,” said IFF’s Fibig.

The deal is being executed through a Reverse Morris Trust, a tax efficient structure which allows a company to manage its tax profile by spinning off a unit that it wants to divest while simultaneously merging it with another company.

On closure of the deal, IFF expects cost savings to the tune of $300 million on a run-rate basis by the end of the third year.

Both companies have said, they have obtained fully-committed debt financing from Credit Suisse and Morgan Stanley.

Winder Investments, IFF’s largest shareholder, has consented to vote in favor of the deal.

Evercore served as DuPont’s advisers while Greenhill & Co and Morgan Stanley advised IFF on the deal.

Categories: Creativity, Economy & Finance, Entrepreneurship, HR & Organization, Strategy

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