Daily Management Review

IFF And DuPont In A ‘$45 billion’ Merger Deal


DuPont selected IFF as the “preferred strategic partner for N&B”.

International Flavors & Fragrances Inc has informed about the merger with a “nutrition & biosciences” unit of DuPont Inc which values “$26.2 billion”. The said deal will give birth to a “new consumer giant” which will value over “$45 billion”.
As per the agreement of the deal, DuPont shareholders will have “55.4%” of the new company’s shares, while the current shareholders of IFF will have the rest of the shares. Moreover, IFF has also informed that both the companies have “unanimously” given their approval for the deal.
IFF will also play an amount of “$7.3 billion” as one time cash payment to DuPont, manufacturer of industrial materials which is based out of New York. The C.E.O of IFF, Andreas Fibig, will continue as the chairperson of the board besides running the show in the new company.
As per a report from Bloomberg, Ireland based Kerry Group was in talks with DuPont for its “nutrition unit”. In the words of the executive chairman of DuPont, Ed Breen:
“We conducted a very thorough process leading us to the selection of IFF as the preferred strategic partner for N&B”.
IFF’s work is with fragrance and flavour creation which works with brands across the globe to “develop scents and tastes for products that are household names”. Fibig from IFF said:
“Together, we will create a leading ingredients and solutions provider with a broader set of capabilities to meet our customers’ evolving needs”.
Reverse Morris Trust, a “tax-efficient structure”, will be involved in the execution process, while Reuters reported:
“Such transactions let a company avoid a big tax bill by spinning off a unit that it wants to divest and simultaneously merging it with another company”.
Following the completion of the deal, IFF is expecting to save nearly “$300 million on a run-rate basis by the end of third year”. Credit Suisse along with Morgan Stanley have made their commitment to filly finance debt. Furthermore, IFF has also stated that Winder Investments, the largest shareholder of the company has agreed to support the deal. On the other hand, added Reuters:
“Greenhill & Co and Morgan Stanley advised IFF while Credit Suisse Securities (USA) and Evercore served as DuPont’s advisers”.