Ajinomoto, the Japanese food and ingredients company, is to take total control of Calpis, the Tokyo-based food, drinks and feed additives producer, in a share exchange deal valued at US$680m.

Under the deal, one share of Calpis common stock will be exchanged for 0.95 of each share of Ajinomoto common stock.

Ajinomoto already held just under 25% of Calpis, which will now become a wholly-owned subsidiary.

The companies expect a number of synergies to arise from the deal, including cooperation in the health, functional foods and beverages businesses, in overseas activities, and in research and development. Ajinomoto added that the merger would help strengthen the existing Calpis business and reduce common expenses through integration.

Ajinomoto said Calpis would, for the time being, continue as an independent company, with its management team and systems remaining in place.

Calpis shares are expected to be finally delisted on 25 September, and the effective date for the completion of the exchange is 1 October.