The Dutch company DSM, which specializes in nutraceutical ingredients, and the Switzerland-based Firmenich, which specializes in flavors and fragrances, have entered into  an agreement for the two companies to merge. This will combine the two companies’ capacities and 125-plus year heritages in their own platforms in four complementary businesses.
 
DSM-Firmenich will form a new global-scale partner to serve the food and beverage industries, the beauty products industry, the health, nutrition, and personal care business, and the animal nutrition and health business.
 
The new company also announced that it will combine both DSM’s and Firmenich’s longstanding sustainability commitments, and the merger was compelled by the attractive synergy potential, potential for growth and earnings, and an enhanced strategic position across each of the company’s markets.
 
DSM-Firmenich anticipates sales growth moving to the 5-7% range over the medium term and high single-digit adjusted EBITDA growth. The combination is expected to realize 350 million euros, recurring run-rate pre-tax, including an uplift of around 500 million euros in annualized revenues as a result of accelerated growth.
 
"DSM-Firmenich will bring together leading creativity and cutting-edge science and innovation. Together we will be able to better serve the needs of customers and deliver compelling growth and returns,” said Thomas Leysen, chairman of DSM’s Supervisory Board. “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."
 
"The combination of DSM and Firmenich is transformational, and brings together two culturally aligned and iconic businesses, each with over 125 years' heritage of innovation. Our shared purpose and common values, combined with our highly complementary capabilities gives me confidence we can accelerate our growth further through innovation and new creations. I am confident that for all stakeholders of the future DSM-Firmenich business, the most exciting times are still to come,” said Patrick Firmenich, chairman of Firmenich.
 
 "We are honored to propose the combination of DSM and Firmenich, and the opportunity to bring together 28,000 passionate people with a common commitment to enable our customers to realize their ambitions as we better the health and well-being of people and the planet, said Geraldine Matchett and Dimitri de Vreeze, co-CEOs of DSM. “Together DSM-Firmenich will enjoy complementary capabilities, including one of the largest creation communities in the industry, enabling us to unlock new opportunities for customers as well as position us to deliver enhanced long-term growth and shareholder value, sustainably. By coming together, we will establish a company where anyone, anywhere in the world, wishing to make a positive impact should aspire to work."
 
The perfumery and beauty business, with combined revenues of 3.3 billion euros, will create fragrances and beauty products leading in renewable, natural, proprietary, biodegradable, and biotechnology-derived ingredients, according to the company. Firmenich will expand into DSM’s beauty ingredients division to offer beauty products with superior sensorial experiences and differentiated performance.
 
The food and beverage business that will form as a result of the merger will have a revenue of 2.7 billion euros, and will merge the two company platforms in order to provide healthier, better-tasting, nutritious, and sustainable products that deliver unique consumer experiences. The companies will enhance nutritional profiles of foods with vitamins, probiotics, and lipids, while also reducing sugar and salt, and will innovate in clean-label products and plant-based foods.
 
The health, nutrition, and care business will combine revenues of 2.2 billion euros, encapsulating a portfolio of products including dietary supplements, early life nutrition, pharmaceuticals, medical nutrition, nutrition products for the under-nourished, and medical devices.
 
Lastly, the animal nutrition and health business, with combined revenues of 3.3 billion euros, will focus on specialty science- and technology-driven products to address the ever-increasing demand for protein through animal produce, while also alleviating pressure on finite natural resources, according to the company. It is one of the world’s largest suppliers of eubiotics, enzymes, and mycotoxin risk management, as well as a range of innovations including the methane inhibitor Bovaer and the fish oil algae alternative Veramaris.

The companies have a combined network of 15 global R&D facilities, and a portfolio of 16,000 patents across 2,600 patent families. At DSM-Firmenich’s core will be scientific capabilities, and cross-fertilization opportunities in bioscience, fermentation, green chemistry, receptor biology, sensory perception and formulation, analytical science, data sciences, and artificial intelligence.
 
The merger will bring the opportunity to combine the talent, best practices, and learnings across 28,000 employees for everywhere each company operates, according to DSM-Firmenich, and the new company will continue to stay on track with its performance in credentials related to the United Nations Sustainable Development Goals.
 
The leadership roles will include Thomas Leysen, current chairman of the supervisory board of DSM, who will be appointed chairman of DSM Firmenich. Patrick Firmenich will be appointed vice chairman. Geraldine Matchett and Dimitri de Vreeze, co-CEOs of DSM, will be appointed co-CEOs of the new company, including CFO and COO responsibilities, respectively. Emmanuel Butstraen, president of the taste & beyond business at Firmenich, will be appointed chief integration officer.
 
DSM shareholders will own 65.5% of DSM-Firmenich, while Firmenich shareholders will own 34.5% of the new company and receive 3.5 billion euros in cash.
 
More information on the merger’s transaction process, leadership, and conditions can be found here.