International Flavors & Fragrances Inc. (NYSE: IFF) shares plummeted Monday, after the company reported upbeat earnings for its first quarter and agreed to acquire Frutarom for $7.1 billion.
Under the terms of the agreement, which has been unanimously approved by the Boards of Directors of both companies, Frutarom’s shareholders will receive for each Frutarom share $71.19 in cash and 0.249 of a share of IFF common stock, which, based on the 10-day volume weighted average price (VWAP) for IFF’s common stock for the period ending May 4, represents a total value of $106.25 per share.
By combining with Frutarom, IFF is accelerating its Vision 2020 strategy to create a global leader in taste, scent and nutrition. The combination unites two industry-leading, innovative companies with complementary customers, capabilities and geographic reach, resulting in more exposure to fast growing end markets and an enhanced platform to deliver sustainable, profitable growth.
The combined company’s customers will have access to comprehensive and differentiated integrated solutions with increased focus on naturals and health and wellness.
"This transaction is a big win and a fantastic outcome for shareholders, customers and employees of both companies,” said IFF CEO Andreas Fibig.
"Frutarom has an extremely attractive product portfolio, including broad expertise in naturals and diverse adjacencies with capabilities beyond our core taste and scent businesses. It also has significant exposure to complementary and fast-growing small- and mid-sized customers."
IFF shares lost $6.55, or 4.6%, to $135.60.
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