International Flavors & Fragrances (IFF) and DuPont announced landmark plans to merge IFF with DuPont’s Nutrition & Biosciences (N&B) business last December. The deal values the combined company at US$45.4 billion, reflecting a value of US$26.2 billion for the N&B business. In an exclusive interview, Andreas Fibig, Chairman and CEO of IFF, goes into detail about the company’s strategy behind the monumental deal.
“These organizations are highly complementary and very much grounded in innovation. We have established our integration office and are starting to leverage some of the learnings and best practices that we have had from previous transactions to create a good and solid foundation. We are aiming for a closing date of the first quarter of 2021, so there is still some time for the planning and execution,” Fibig explains.
IFF reportedly beat out stiff competition from other suppliers to secure the monumental merger. The combination is touted as creating a global leader in high-value ingredients and solutions for the global food & beverage, home & personal care and health & wellness markets. The new company is expected to gain a top position across attractive taste, texture, scent, nutrition, cultures, enzymes, soy proteins and probiotics categories.
“Internally, we see that people are very excited about the merger because they see how the product and technology portfolios fit together, what’s in the R&D pipeline and what we could invest in to solve the challenges of our customers. The customer response has been amazingly positive too. Many came to us and said that it was an industry-leading move in terms of innovation, where there was finally now a player in this space with very strong biologics capabilities,” details Fibig.
IFF headquarters in New York, US.
In an example of how the portfolio synergies could work together on a trending product, a concept for a plant-based burger is highlighted. Under the creation of a new supply side behemoth, N&B’s legacy business would be supplying plant-based protein, texturants and binders. IFF’s portfolio would offer natural antioxidants, flavors, taste modulation solutions, delivery systems as well as natural colors and grill marks. In short, it would be a product created from comprehensive synergies, allowing for complementary reach to shared end-markets.
The merger with N&B follows on from IFF’s US$7.1 billion acquisition of Frutarom, which was finalized in October 2018 and took IFF into new realms beyond flavors and fragrances alone. Integration of the patchwork that was Frutarom is still ongoing and is expected to be all but complete by the end of 2020.
In IFF’s recent full year results announcement, the company reported that it had continued to achieve significant cost synergies from Frutarom well ahead of year one targets. It also captured solid year-one revenue synergies, demonstrating broad operational strength.
IFF’s reported net sales for the full year 2019 totaled US$5.1 billion, an increase of 29 percent from US$4 billion in 2018, including the contribution of sales related to Frutarom. “2019 was a transformational year for IFF as we continued to take important steps to redefine our industry, including our integration of Frutarom and recently announced combination with N&B,” says Fibig.
“Looking to 2020, our priorities are clear: drive growth and profitability in our business, substantially complete the Frutarom integration and lay the groundwork for a successful combination with N&B,” he concludes.
