IFF acquires natural ingredients rival Frutarom for $7bn

The deal between the flavour and fragrances giant and Israeli ingredients firm is said to create a 'global leader' in natural cosmetics

Andreas Fibig, CEO of IFF

International Flavors & Fragrances (IFF) has acquired Israeli natural ingredients rival Frutarom for US$7.1bn including its debt.

The purchase, IFF’s biggest ever, will make the New York-based company the flavour industry’s second largest player, uprooting Firmenich International behind Givaudan.

IFF’s move into the natural sector reflects the increasing demand for natural scents, as Givaudan announced in March that is was in negotiations to acquire aq 40.6% stake in French ingredients group Naturex.

Frutarom intends to accelerate IFF’s exposure to local and mid-size customers through this acquisition.

“Frutarom has an extremely attractive product portfolio, including broad expertise in naturals and diverse adjacencies with capabilities beyond our core taste and scent businesses,” said Andreas Fibig, CEO of IFF.

“By combining our deep R&D expertise with Frutarom’s, we are offering our customers a broader range of solutions and accelerating our growth strategy.

“We believe this combination will lead to faster and more profitable growth, enhanced free cash flow and generate greater returns for our shareholders.”

Frutarom is expected to reach sales of more than $1.6bn in 2018 and has target sales of $2.25bn by 2020.

“The growth potential for the combined company is substantial and our shareholders will continue to enjoy this upside,” added Ori Yehudai, CEO of Frutarom.

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