Frutarom shareholders voted to approve the proposed combination of Frutarom and International Flavors & Fragrances Inc. (IFF) at the general meeting of Frutarom shareholders yesterday. Of the votes cast, 94.6 percent were in favor of the proposed merger, representing approximately 74.7 percent of all outstanding shares.
“We are pleased that Frutarom shareholders have approved the combination with IFF, marking another milestone on our path to unlock the value creation potential of the combined company,” says IFF Chairman and CEO, Andreas Fibig. “Together, IFF and Frutarom will become a global leader in taste, scent and nutrition, with a broader customer base, more diversified product offerings and increased market penetration. Through our integration planning work, we continue to be confident in the opportunities that lie ahead and the ability of the combination to accelerate profitable growth, enhance free cash flow and generate greater returns for IFF shareholders.”
Ori Yehudai, President and CEO of Frutarom, also notes: “We appreciate the support from our shareholders as this transaction represents a landmark moment for Frutarom, delivers significant and immediate cash value to our shareholders and provides an opportunity to participate in the substantial potential upside of the combination. We continue to work closely with IFF's management team to ensure the successful completion and integration of our two great companies and we look forward to driving growth by capitalizing on the best of both organizations.”
Upon the closing of the transaction, Frutarom’s shareholders will receive for each Frutarom share $71.19 in cash and 0.249 of a share of IFF common stock. The deal remains subject to clearance by the relevant regulatory authorities and other customary closing conditions and is expected to close in the fourth quarter of 2018.
The deal follows a series of acquisitions from Frutarom throughout last year, marking significant growth for the flavors and fragrances specialists. Last December, Frutarom Industries continued its acquisition roll by signing an agreement for the purchase of 51 percent of the shares of the Brazilian company Bremil Indústria Ltda, the top producer of savory solutions in Brazil, at a company value of approximately US$73 million. This marked the twelfth acquisition for Frutarom in 2017 and came just one day signed a deal to acquire Polish flavors and fragrances company Pollena-Aroma.
IFF and Frutarom report to having complementary customers, capabilities and geographic reach, and as such it is hoped the combination of the two will result in more exposure to fast-growing end markets and an enhanced platform to deliver sustainable, profitable growth. The deal would also significantly improve IFF’s exposure to the fast-growing small- and mid-sized customers, including private label. Frutarom has a strong track record of growth, with expected sales of above US$1.6 billion in 2018, and their previously announced target of US$2.25 billion in sales by 2020.
The combined company’s customers will have access to comprehensive and differentiated integrated solutions with an increased focus on naturals and health and wellness, according to IFF.
