- This merger will allow International Flavors and Fragrances & DuPont’s Nutrition and Biosciences unit to form a new company
- The new enterprise is poised to become a global leader in myriad sectors including food & beverage, health and wellness, and others
- DuPont to receive a significant cash payment following the finalization of the deal
US-based sensory experience innovator International Flavors and Fragrances has reportedly announced a merger with leading bio company DuPont Nutrition and Biosciences. This $26.2 billion agreement will enable the establishment of a new entity.
According to the terms of the merger, DuPont shareholders will have 55.4% of the shares in the new company, while IFF shareholders will hold 44.6%. Industry experts claim that following the deal finalization, DuPont will receive a cash payment worth $7.3 billion.
This agreement has the unanimous approval of both parties, with the new joint business venture valued at nearly $45.4 billion.
The new company, to be based in New York, is set to become a world leader in prominent industries such as home & personal care, health & wellness as well as food & beverage, claim experts with the knowledge of the matter. Furthermore, the company will have a projected 2019 revenue of over $11 billion alongside pretax earning of around $2.6 billion.
This merger is a Reverse Morris Trust transaction, giving a company the ability to spin off assets to avoid paying taxes on any earnings, provided that it meets all the legal requisites.
Once the deal is concluded, the board of the new company will comprise seven directors currently on the IFF board and six directors appointed by DuPont. Also, six directors from each company will be appointed at the annual meeting in 2022.
The post of Chairman & CEO of the new company will be held by current IFF CEO Andreas Fibig. From 1st
June 2021, Ed Breen, DuPont’s Executive Chairman will come on board as lead independent director.
The deal is currently awaiting approval from IFF shareholders.
Source Credit: https://www.washingtonpost.com/business/iff-to-merge-with-dupont-nutrition-and-biosciences-unit/2019/12/15/5aab0f78-1f8f-11ea-b034-de7dc2b5199b_story.html