The recent spate of acquisitions in the F&F industry shows that consolidation is ongoing, radically changing the industry’s landscape. In the wake of Givaudan’s purchase of Quest and IFF’s recent stabilization, things are heating up among top-tier companies. Now comes word that Firmenich has agreed to purchase Danisco’s flavor business for DKK 3.36 billion. The purchase bolsters Firmenich’s citrus, naturals and dairy capabilities, while expanding its expertise in vanilla, ice cream and beverage bases. The Danisco business affected generated revenues of DKK ~1.5 billion in the last fiscal year, some 2–3% of the world market.
According to Karen Saddler, vice president of communications at Firmenich, “Danisco’s flavor division represents a good fit for Firmenich because it complements our product portfolio and market coverage in flavors, positioning us among the top three in the industry. It also strengthens our position in natural ingredients for the food, beverage and fragrance markets, taking us to a unique level of expertise in both natural and synthetic ingredients. This will reinforce our capacity for innovation and our focus on a sustainable business model, making responsible use of both.
“Finally, Danisco flavor division people share our innovative and entrepreneurial spirit, and our core values, making the acquisition a great cultural fit—a key success factor in any acquisition and one that we looked at carefully.
“It is also important to underline that the acquisition fits Firmenich's long-term strategy based on industry-leading organic growth and targeted acquisitions that complement our global offering.”
Saddler says that nothing has been decided in regards to integration. Both companies will operate separately until the deal is closed, likely by the end of June. Transition plans will be announced after that time.
In an interesting twist, the companies’ agreement joins them in a partnership for serving the food industry.
“The partnership agreement with Danisco aims to provide a unique offering of the best in taste and texture,” says Saddler, “delivering comprehensive flavor and food ingredient solutions to selected segments of the market. The exact terms of the partnership will be refined after the closing of the deal, expected to take place towards the end of June, and communicated to the market in the following months.”
Is Firmenich eyeing any additional acquisitions?
“Our main focus will be on successfully completing the integration of this acquisition,” says Saddler. “However, this would not prevent us from pursuing a further opportunity, should one present itself.”
In other company news, Firmenich is opening an innovation and sustainability center for natural ingredients in the south of France.
“It will develop our know-how in natural ingredients for the flavor and fragrance markets,” says Saddler, “further enhancing the creative scope of our perfumers and flavorists, and ensuring the sustainable use of natural resources in our business activity. We are convinced that our unequalled know-how in both natural and synthetic ingredients is the ideal combination to ensure a truly sustainable business model in flavors and fragrances.”