Sector News

A deal for DuPont’s food business will create a $45 billion giant

December 17, 2019
Food & Drink

DuPont (DD) is creating a new $45.4 billion consumer goods giant by merging its food and nutrition business with International Flavors & Fragrances.

The deal announced Sunday values the DuPont unit at $26.2 billion. DuPont shareholders will retain a majority stake in the new entity, which will have a combined annual revenue of more than $11 billion.

New York-based IFF (IFF) develops flavors and fragrances for consumer brands. The company has 33,000 customers and hundreds of manufacturing and research facilities around the world, according to its website.

DuPont, which counts Kevlar and Styrofoam as clients, has been shaking up its business in recent years. The former giant DowDuPont is now three separate companies that focus on material sciences (now called Dow Inc. (DOW)), agriculture (now dubbed Corteva (CTVA)) and specialty goods (DuPont). Aside from its nutrition unit, DuPont also focuses on products related to electronics, transportation and construction.

IFF and DuPont want to blitz the global ingredients market while cutting down on costs significantly. The firms said in a joint statement Sunday that they are projecting savings of about $300 million within three years of closing the deal, and expect the new company to achieve a leading position in segments including soy proteins, enzymes and probiotics.

The firms want to close the deal, which is still subject to approval by regulators and IFF shareholders, by early 2021. IFF CEO Andreas Fibig will continue to serve as chairman and chief executive.

Consumers have been increasingly gravitating toward healthier and more natural flavors, a trend that the companies said played an important factor in their decision to merge. Natural flavors are “the dominating segment” in the global food flavoring industry, accounting for over 50% of the market in 2018, according to Wall Street research firm Reports and Data.

IFF reportedly beat out Irish food giant Kerry Group for the deal. As of last week, the European company had also been interested in snapping up DuPont’s nutrition division, according to a Bloomberg report. Kerry Group did not immediately respond to a request for comment from CNN Business outside regular business hours.

“We conducted a very thorough process leading us to the selection of IFF as the preferred strategic partner,” Ed Breen, DuPont’s executive chairman, said in the statement Sunday. “I am confident that [the nutrition unit] will be well-positioned for its next phase of growth.”

By Michelle Toh

Source: CNN

comments closed

Related News

June 24, 2022

Carlsberg announces resignation of CFO Heine Dalsgaard

Food & Drink

Carlsberg has announced the departure of its chief financial officer (CFO), Heine Dalsgaard, after six years in the position. In a statement, Carlsberg said that Dalsgaard was resigning from the post to take up the role of CFO at a private equity-backed company in a different industry.

June 24, 2022

Kellogg to split into three companies, focus on snacks

Food & Drink

Kellogg will split into three independent companies to focus on the snack business, Reuters reported Tuesday. The snacking portfolio will comprise the main business, while the North America cereal unit and the plant-based business will be spun off. The company is also considering a sale of the plant-based business.

June 24, 2022

Mondelēz to buy energy bar company Clif Bar for $2.9bn

Food & Drink

The snacks giant says the acquisition will help build on its commitment to “lead the future of snacking” in key geographies worldwide. Once the transaction is completed, Mondelēz will continue to operate the Clif Bar business from its headquarters in Emeryville, California. The snack giant will also continue to manufacture Clif Bars’ products, which include Clif Bar, Luna and Clif Kid, at its facilities in Idaho and Indiana.