PARIS — Firmenich and DSM said Tuesday morning that they will merge to become the largest fragrance, beauty, well-being and nutrition supplier in the world, with revenues of more than 11 billion euros.
The new group combining the Swiss fragrance and flavors supplier, which is the largest privately owned and among the largest globally, and Dutch science-based health and nutrition concern is to be called DSM-Firmenich.
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At 11:10 a.m. CET, shares of DSM were trading up 7.8 percent in Amsterdam.
The merger will be made through a public offer for DSM shares in exchange for DSM-Firmenich shares, with a one-to-one ratio, plus a contribution of Firmenich shares to DSM-Firmenich in exchange for DSM-Firmenich shares and 3.5 billion euros in cash.
DSM shareholders will own 65.5 percent of the company, and Firmenich stakeholders the remainder at DSM-Firmenich’s inception.
The deal is expected to close in the first half of 2023.
The companies aim for an additional 350 million of recurring profit and 500 million euros in annual sales uplift several years after the merger.
“DSM-Firmenich will bring together leading creativity and cutting-edge science and innovation. Together, we will be able to better serve the needs of customers and deliver compelling growth and returns,” Thomas Leysen, chairman of the DSM supervisory board, said in a statement.
“The combination of DSM and Firmenich is transformational, and brings together two culturally aligned and iconic businesses, each with over 125 years’ heritage of innovation,” said Patrick Firmenich, chairman of Firmenich. “Our shared purpose and common values, combined with our highly complementary capabilities, gives me confidence we can accelerate our growth further through innovation and new creations. I am confident that for all stakeholders of the future DSM-Firmenich business, the most exciting times are still to come.”
The new company is to have four businesses. That will include a perfumery and beauty division, with combined revenues of 3.3 billion euros.
“DSM-Firmenich will be the foremost creator of positive fragrances and beauty products, as well as a global aroma ingredients business that together have leadership in renewable, natural, proprietary biodegradable and biotechnology-derived ingredients,” the companies said jointly.
Further, Firmenich’s perfumery and ingredients business is to be expanded into beauty via DSM’s personal care and aroma business, which taps into the clean and wellbeing categories, among other burgeoning segments today.
DSM-Firmenich’s business will also include food and beverage/taste and beyond, with sales of 2.7 billion euros; health, nutrition and care, with sales of 2.2 billion euros, and animal nutrition and health, with sales of 3.3 billion euros.
Projected mid-term sustainable organic sales growth per year is between 5 percent and 7 percent, with an adjusted EBITDA margin of 22 percent to 23 percent.
DSM-Firmenich will have a Swiss-based holding company with a principal seat in Kaiseraugst, Switzerland, and be listed on the Euronext Amsterdam.
The group’s headquarters will be both in Kaiseraugst and Maastricht, the Netherlands.
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