The newly formed DSM-Firmenich entity will focus on four high-performing and complementary businesses: perfumery & beauty; food & beverage; health, nutrition & care; and animal nutrition & health
DSM and Firmenich have made a major announcement for the nutrition, beauty and well-being sectors. The two companies have entered into a business combination agreement (the BCA) to establish the leading creation and innovation partner in nutrition, beauty and well-being (DSM-Firmenich).
Once the merger is completed, DSM-Firmenich, a newly incorporated Swiss-domiciled company, will hold the DSM and Firmenich businesses and DSM-Firmenich will be listed on Euronext Amsterdam. The new entity will have a dual headquarter in Switzerland (Kaiseraugst) and the Netherlands (Maastricht).
The combination will bring together Firmenich's unique leading Perfumery and Taste businesses, its world-class science platforms and associated co-creation capabilities with DSM's outstanding Health and Nutrition portfolio and renowned scientific expertise. The new company will have four high-performing and complementary businesses, each with leading positions and underpinned by world-class science.
Successful mergers require more than complementary capabilities or compelling financials
The merger of DSM-Firmenich will further accelerate innovation for the industry and generate new growth opportunities for customers. It will form a new global-scale partner to serve the food and beverage industry, combining DSM's Food & Beverage and Firmenich's Taste & Beyond businesses. Firmenich's world-leading global Perfumery and Ingredients business will expand further into Beauty through the addition of DSM's Personal Care & Aroma business. These new combined businesses will be joined by DSM's high-performing Health, Nutrition & Care and Animal Nutrition & Health businesses.
The combined company's extensive global footprint will provide customers with access to an unprecedented network of R&D, creation and application capabilities, informed by local consumer preferences, across regional and local hubs around the world. Both businesses have successful track records of investing in and delivering ground-breaking innovations that create and reshape markets.
The merger is subject to customary conditions, including obtaining relevant regulatory clearances and completing relevant employee consultation procedures, and expected to be completed ultimately in the first half of 2023
DSM-Firmenich will bring together both companies' relentless commitment to sustainability across the value chain, and in doing so help to drive environmental, social and governance leadership globally. Sustainability considerations have long been embedded within both companies' strategies and DSM-Firmenich combines two companies with shared values and longstanding action on climate change, embracing nature and care for people.
The merger is expected to be completed ultimately in the first half of 2023
The compelling strategic rationale for this combination is reflected in the attractive synergy potential, resulting in double-digit EPS accretion and an enhanced strategic position across the markets in which DSM-Firmenich will operate.
Thomas Leysen, Chairman of the DSM Supervisory Board, said: "Together we will be able to better serve the needs of customers and deliver compelling growth and returns. However, successful mergers require more than complementary capabilities or compelling financials; they not only require balanced governance and a respect of the interests of all stakeholders, but they crucially require shared values. My colleagues and I are convinced we have all of those elements, and it is for this reason that the Supervisory Board of DSM concluded that this is truly a merger which is in the interest of all stakeholders."
Gilbert Ghostine, CEO of Firmenich, added: "This is the natural next step in Firmenich's evolution. We are excited to build on Firmenich's tradition of entrepreneurial excellence and create a global leader that will be able to bring breakthrough innovation and technologies to our customers, addressing the most pressing needs of consumers."
The four businesses will be supported by a world-class foundation in science and technology, a vertically integrated portfolio of nutrition, natural and renewable ingredients, as well as best-in-class business functions. Both DSM and Firmenich have successful track records of delivering ground-breaking innovations that create and reshape markets for growth (for example Bovaer, Veramaris, biodegradable fragrance encapsulation, renewable fragrance materials, sugar and salt reduction, plant-based foods, fermentation processes for human milk oligosaccharides, and lipids).