International Flavors & Fragrances Inc. on Sunday stated it should merge with DuPont Inc’s (DD.N) $26.2 billion vitamin & biosciences unit in a deal that may create a new consumer giant valued at greater than $45 billion.
DuPont shareholders will own 55.4 percent of the shares under the terms of the agreement of the new firm, and existing IFF shareholders will own 44.6%, IFF stated in an announcement. The deal has been unanimously permitted by both boards, New York-based, mostly IFF stated.
Industrial materials maker DuPont will even obtain a one-time cash payment of $7.3 billion upon closing of the deal, IFF added.
IFF Chief Executive Officer Andreas Fibig will run the combined firm and also will continue to be chairman of the board.
Ireland’s Kerry Group was additionally negotiating with DuPont for its nutrition unit, IFF, which creates flavors and fragrances, works with global brands to develop scents and tastes for products, which can be household names.
“Together, we are going to create a leading ingredient and solutions provider with a broader set of capabilities to fulfill our customers’ evolving wants,” IFF’s Fibig stated.
The combination might be executed utilizing a tax-efficient structure known as a Reverse Morris Trust, IFF stated. Such transactions let a company keep away from a big tax bill by spinning off a unit that it needs to divest and simultaneously merging it with another company.
After the deal closes, IFF expects value financial savings of about $300 million on a run-rate basis by the end of the 3rd year. The companies stated they’d obtained totally-committed debt financing from Morgan Stanley and Credit Suisse.