DSM clears all competition clearance hurdles in move to merge with Firmenich

04 Apr 2023 --- Netherlands-based health and nutrition player DSM reveals it has only one final bridge to cross in its merger with Firmenich, the largest privately-owned flavor and fragrance company in the world.

The new company, DSM-Firmenich, could start trading on the stock exchange as early as April 18 of this year now that it has received the final clearance from the Competition Commission of India.

The new global company will be headquartered in Switzerland and listed on Euronext Amsterdam. DSM-Firmenich will be a major producer with innovative capabilities in the flavor, fragrance, texture and nutrition categories.

“In the sense of competition clearances that are needed, this was the last one,” a representative from DSM tells NutritionInsight. “However, there is still one hurdle, or condition if you will, which is the need to receive at least 80% of DSM shareholders tendering their shares by the 17th of April.”

Approaching the final threshold
The DSM boards unanimously reiterated their recommendation that DSM shareholders tender their DSM Ordinary Shares into the Exchange Offer.

A representative from DSM states that shares of DSM-Firmenich should begin trading on April 18.Moreover, during an extraordinary general meeting of DSM’s shareholders in January of this year, 99% of shareholders voted in favor of the deal.

“I think it’s worth mentioning that throughout this quite lengthy process, we have had feedback from a considerable proportion of our shareholders,” the representative emphasizes. “It’s a hurdle that we need to cross, but I don't think it’s one that we are necessarily concerned about crossing.”

“Once that is achieved, the deal is considered to be unconditional,” he explains. “In other words, we will have met all of the conditions required. Effectively, the very next day, on the 18th of April, shares of DSM-Firmenich will begin to trade.”

However, the representative underscores that, importantly, even at that time, it will still not be a merged company.

“We then have a period of approximately three to four weeks, the timing is still to be determined, in which the company has not yet fully merged,” he reveals. “At the moment, there is an indicative date of May the 8th, which would be the day that the transaction concludes and Firmenich becomes fully a part of DSM and the merger is considered to be technically complete.”

What’s to be expected
In May of last year, when the merger was originally announced, Firmenich stated that the merger would allow the company to expand its Perfumery and Ingredients categories into the Beauty space with the support of DSM’s Personal Care & Aroma business.

Furthermore, the combined company’s extensive global offerings is expected to provide customers with access to “unprecedented” R&D and application creation capabilities.

In March, Firmenich revealed that it was under investigation by four antitrust authorities following unannounced inspections of its offices in the UK, France and Switzerland. The two companies reveal that they will provide an update to the investigation by way of a supplement to the Offering Circular.

By William Bradford Nichols