Danish food ingredients group Danisco has signed a deal to sell its flavours business to Swiss giant Firmenich for around DKK3.36bn (US$613m).
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The agreement will see Danisco focus on producing bio-ingredients, texturants and sweeteners but also keep an interest in flavours through a “strategic partnership” with Firmenich.
The two companies will work together to produce flavours for the food industry. “The divestment of Flavours should be seen as a value-creating and forward-looking initiative, Danisco said.
“The new ownership will create a critical mass for the activity and the strategic partnership allows us to further capitalise on Danisco’s global sales and applications organisation in close cooperation with Firmenich.”
While Danisco has grown to become one of the top three players in bio-ingredients, texturants and sweeteners, the company admitted its position in flavours is “limited”. The company’s flavours business generated around DKK1.5bn in sales last year, which, the company said, only accounted for at most 3% of the flavours market worldwide.
Firmenich CEO Patrick Firmenich said: “This acquisition reinforces our position as the leading innovation partner for our clients and a top player in both natural and synthetic ingredients for the flavour and fragrance industry.”
The closing of the transaction is expected to be complete in six weeks. The partnership with Danisco will be rolled out gradually during the months following the closure of the deal.
