TAGS: Perfumes & Fragrances
DSM and Firmenich announced that they have entered into a business combination agreement (BCA) to establish the leading creation and innovation partner in nutrition, beauty, and well-being (DSM-Firmenich).
The combination will bring together Firmenich’s Perfumery and Taste businesses, its world-class science platforms, and associated co-creation capabilities with DSM’s Health and Nutrition portfolio and renowned scientific expertise.
The new company will have four high-performing and complementary businesses, each with leading positions and underpinned by world-class science.
Key Highlights of Merger
The combination of
Firmenich and
DSM will establish the leading creation and innovation partner in nutrition, beauty, and well-being with four high-performing and complementary businesses, each with pioneering, leadership positions:
Perfumery & Beauty
Perfumery & Beauty, with combined revenues of €3.3bn, will be the foremost creator of positive fragrances and beauty products and a global aroma ingredients business that together has leadership in renewable, natural, proprietary biodegradable, and biotechnology-derived ingredients.
Firmenich’s global Perfumery and Ingredients business will expand into Beauty through the addition of DSM’s Personal Care & Aroma business to delight consumers with superior sensorial experiences and differentiated performance, delivering active benefits, addressing clean & hygiene, health & reassurance, and emotion & well-being.
Health, Nutrition & Care
Health, Nutrition & Care, with revenues of €2.2bn, will continue its development as an end-to-end partner providing customized quality solutions that support the health of people at every life stage.
It will aim to keep the world’s growing population healthy through a broad portfolio of sustainable, science-backed innovative solutions, addressing consumers’ health and lifestyle needs, for customers in the dietary supplements, early-life nutrition, pharmaceuticals, medical nutrition, nutrition improvement for the under-nourished, and medical devices markets.
Food & Beverage / Taste & Beyond
Food & Beverage / Taste & Beyond, with combined revenues of €2.7bn, will form a global-scale partner to the food and beverage industry with extensive capabilities in taste, nutrition, and functionality in order to provide delicious, nutritious, and sustainable products that deliver unique and superior consumer experiences.
Animal Nutrition & Health
Animal Nutrition & Health, with revenues of €3.3bn, will continue to focus on specialty science- and technology-driven solutions to the ever-increasing demand for protein such as meat but also eggs, fish and dairy, while also alleviating the pressure on the planet’s finite natural resources.
Merger to Form Global-scale Partner
The merger of DSM-Firmenich will further accelerate innovation for the industry and generate new growth opportunities for customers. Firmenich’s global Perfumery and Ingredients business will expand further into Beauty through the addition of DSM’s Personal Care & Aroma business. These new combined businesses will be joined by DSM’s high-performing Health, Nutrition & Care, and Animal Nutrition & Health businesses.
DSM-Firmenich will benefit from complementary capabilities across fragrance, taste, texture, and nutrition, fueled by world-class science and proprietary capabilities. The merger of DSM-Firmenich will form a new global-scale partner to serve the food and beverage industry, combining DSM's food and beverage and Firmenich's “Taste & Beyond” businesses.
DSM-Firmenich will bring together both companies’ relentless commitment to sustainability across the value chain, and in doing so help to drive environmental, social, and governance leadership globally. Sustainability considerations have long been embedded within both companies’ strategies and DSM-Firmenich combines two companies with shared values and longstanding action on climate change, embracing nature and care for people.
Thomas Leysen, chairman of the DSM Supervisory Board, commented, “
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.”
“However, successful mergers require more than complementary capabilities or compelling financials; they not only require balanced governance and respect for the interests of all stakeholders, but they crucially require shared values. My colleagues and I are convinced we have all of those elements, and it is for this reason that the Supervisory Board of DSM concluded that this is truly a merger which is in the interest of all stakeholders.”
Patrick Firmenich, chairman of Firmenich, commented, “
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. Our shared purpose and common values, combined with our highly complementary capabilities give 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.”
Aiming to Deliver Enhanced Long-term Growth
Geraldine Matchett and Dimitri de Vreeze, co-CEOs of DSM, commented, “
We are honored to propose the combination of DSM and Firmenich, and the opportunity to bring together 28,000 passionate people with a common commitment to enable our customers to realize their ambitions as we better the health and well-being of people and the planet. Together DSMFirmenich will enjoy complementary capabilities, including one of the largest creation communities in the industry, enabling us to unlock new opportunities for customers as well as position us to deliver enhanced long-term growth and shareholder value, sustainably. By coming together, we will establish a company where anyone, anywhere in the world, wishing to make a positive impact should aspire to work.”
Gilbert Ghostine, CEO of Firmenich, added, “
This is the natural next step in Firmenich’s evolution. We are excited to build on Firmenich’s tradition of entrepreneurial excellence and create a global leader that will be able to bring breakthrough innovation and technologies to our customers, addressing the most pressing needs of consumers. DSM shares our purpose-led values and, like us, creates value for its customers through its science-based approach and pioneering technologies, making a real difference to people and the planet. I am excited that the legacy of Firmenich will shape a new industry leader that will innovate for a better world.”
DSM-Firmenich’s co-creation capabilities will be exemplified by their perfumers and flavorists, enabling partnerships with customers to fulfill their ambitions. These artisans already harness one of the industry-leading ingredient palettes, building on breakthrough technologies to drive true differentiation for customers.
Under DSM-Firmenich these experts will continue to be supported by strong investment in internal research and development teams, delivering the sensorial experiences and unique signatures that help customers delight consumers.
At inception, DSM shareholders will own in aggregate 65.5% of DSM-Firmenich and the various shareholders of Firmenich will own in aggregate 34.5% of DSM-Firmenich and receive €3.5bn in cash (subject to potential adjustments). This valuation reflects a DSM market capitalization of €25.3bn and implied enterprise value adjusted for the Materials business (EV) of €21.6bn.
Source: Firmenich
