Givaudan to acquire Naturex, forms natural extracts and ingredients leader

26 Mar 2018 --- Givaudan, the global leader in the creation of flavors and fragrances, has entered into an agreement to acquire 40.6% of the shares of Naturex, the global leader in specialty plant-based natural ingredients, for €135 per share, subject to regulatory approvals. Following the acquisition, Givaudan will launch a mandatory cash tender offer for all remaining outstanding shares of Naturex, at a price of €135 per share.

The transaction is supported by both the Board of Directors and the Management of Naturex.

Gilles Andrier, CEO of Givaudan said: “The acquisition of a significant shareholding in Naturex fits fully with our 2020 strategy to expand our offering to deliver natural products to our customers. Givaudan is the global leader in the space of natural flavours and Naturex further complements our capabilities with its strong portfolio of plant extracts and natural ingredients across the food and beverage, nutrition and health and personal care sectors. We look forward to working with the management and shareholders of Naturex in the coming months to secure their support for the acquisition.”

Louie D’Amico, President Designate of Givaudan’s Flavour Division said: “Consumers around the world are increasingly demanding more natural and organic products from food and beverage companies. Naturex will be extremely complimentary to the acquisitions we have announced in this space over the last few years, namely Spicetec, Activ International, Vika and Centroflora Nutra.”

Speaking to FoodIngredientsFirst about the key consumer trends that have led to this acquisition, D’Amico, said: “There is an ongoing global trend towards health and wellness – looking after the body through healthy eating and exercise. As part of this, there is a strong trend towards natural, authenticity and going “back to basics.” Consumers are looking for food and drink products made with simple ‘kitchen cupboard’ ingredients – as close as possible to home-made.”

“Linked to the growing consumer preference for natural foods, we are helping our customers create great tasting products their consumers' trust and that are sustainable. We help them overcome the transition challenges that are inherent with naturals and help deliver the same great tasting products. With this acquisition, we further strengthen our global position in naturals, expanding our offering in natural extracts and solutions.”

And talking about company expectations, D’Amico added: “We believe that by combining our people talents, creation and production expertise, product technologies and passion for our business, we will be able to provide even greater value to our customers, helping them win in the market and delight their consumers.”

“As the worldwide leader in flavors, Givaudan operates a global network with strong local presence in nearly 50 countries. Within Givaudan, Naturex will be able to leverage its product portfolio to a broader customer set and to benefit from Givaudan’s strong market position in the food and beverage industry.”

Headquartered in Avignon, France, Naturex has experienced steadily-increasing growth throughout the last 25 years. The Group employs 1,700 people worldwide and in 2017 had revenue of €404.9 million.

Olivier Rigaud, CEO of Naturex commented: “This combination is supported by a strong strategic rationale with an ambition to become the leader in natural ingredients. We are proud to become part of Givaudan and leverage the complementary capabilities for our customers.”

Givaudan and Naturex have entered into a combination agreement providing in particular:
-   An undertaking of Givaudan to launch a cash tender offer following the acquisition of 40.6% of the shares of Naturex;
-   That completion of the tender offer would be subject to reaching the mandatory overall acceptance threshold of 50% of Naturex share capital or voting rights;
-   That Givaudan reserve its right to implement a squeeze if the conditions are met for such procedure;
-   The obtaining by Naturex of an opinion from an independent expert confirming the fairness of the cash tender offer;
-   The recommendation of the tender offer by Naturex Board and the absence of change or withdrawal of such recommendation;
-   The obtaining of the relevant antitrust approvals before the acquisition of shares of Naturex;
-   The approval of an exceptional remuneration for the CEO, conditional upon the success of the offer, in consideration for his involvement in the preparation of the offer;
-   The obtaining of resignation letters from certain members of the Board members of Naturex, conditional upon the acquisition of the shares; and
-   Collaboration in different fields.

This transaction is part of Givaudan's 2020 strategy to strengthen its capabilities in natural flavor solutions for its customers and will create a clear market leader in natural extracts and ingredients.

Naturex sources, manufactures and markets natural specialty ingredients for the food, health and cosmetic industries. As the Natural Maker, the company actively supports the global shift from synthetic to natural through an offer built on two main focus areas: My Natural Food and My Natural Selfcare. Naturex's portfolio includes colors, antioxidants, specialty fruits & vegetables, phytoactives, and numerous other plant-based natural ingredients, designed to create healthy, authentic and effective products.

In a recent interview with The World of Food Ingredients, Naturex CEO Olivier Rigaud discussed the company's business strategy, which has included a string of bolt-ons in recent years, as well as strong organic growth.

Givaudan has been on a mission to bolster its portfolio in recent years as part of its 2020 strategy to strengthen capabilities in integrated solutions. And today’s announcement that it intends to acquire shares in Naturex, demonstrates just how significant natural ingredients are in the industry. The €522 million (US$646 million) deal comes at a time when global consumers are demanding more naturalness from their food and beverages than ever before.

There is a strong global trend toward well-being and making mindful choices, while natural ingredients are viewed by consumers as healthier and of better quality compared with highly processed products. These are strong drivers of purchasing decisions.

Givaudan has been responding to such trends by strengthening its portfolio through a series of acquisitions over the last few years, however, this latest move is considered extremely sizeable, with an agreement to acquire 40.6 percent of the shares of the French public listed company, for €135 per share.

Givaudan has been putting continued emphasis on aligning itself with natural flavor trends to keep pace with shifting consumer demand and has been steadily growing through several key acquisitions in recent years.

What other acquisitions has Givaudan completed?
- Back in July 2016, Givaudan completed the acquisition of Spicetec Flavors & Seasonings from ConAgra Foods. At the time Givaudan CEO Gilles Andrier said that the Spicetec product portfolio and capabilities were considered very complimentary to Givaudan’s and will help expand its integrated savory solutions. The total purchase price was US$340 million.

- In January 2017, Givaudan acquired Activ International which offers a range of natural and organic flavors, marine extracts, seafood and vegetable-based culinary solutions to customers. With headquarters in Bienne (Switzerland), Activ operates from locations in Somerset (New Jersey, US), Melaka (Malaysia), Mitry-Mory (Paris, France) and Arequipa (Peru). Terms of the deal were not disclosed at the time and the addition of Activ’s product portfolio was seen to further help Givaudan to strengthen its extensive natural flavor offering.

- Eight months later in September 2017, Givaudan completed the acquisition of Dutch enterprise Vika BV in a bid to bolster its portfolio of natural dairy solutions. Vika offers a range of natural dairy ingredients and stocks, as well as meat and plant-based extracts to customers in the food and beverage industry.

- In the same month (Sept 2017), Givaudan expanded its presence in Brazil by acquiring Centroflora Nutra, the Nutrition Division of Centroflora Group. Centroflora Nutra manufactures botanical extracts and dehydrated fruits for the food, beverage and consumer goods sectors. It offers a wide variety of plant extracts from various regions of the world, with a particular focus on those from the great biodiversity of Brazil. Givaudan said at the time how Centroflora Nutra was such a good fit because it aligned with the company’s sustainability goals and offered a unique opportunity to strengthen the naturals sourcing platform for Givaudan’s flavors, fragrances and cosmetics businesses.

With just under two years of Givaudan’s 2020 strategic strategy left, what could be next for the flavors and fragrance specialist?

FoodIngredientsFirst has also requested more information from Naturex.

By Gaynor Selby & Robin Wyers