DuPont de Nemours Inc (NYSE: DD) and International Flavors & Fragrances Inc (NYSE: IFF) yesterday announced plans for a merger. The merger will be between International Flavors & Fragrances and DuPont’s Nutrition & Biosciences unit, and will create a new consumer company worth over $45 billion.
Under the deal, DuPont shareholders will control 55.4% of the company while shareholders of International Flavors & Fragrance will own 44.6% of the new unit. The two companies announced that the deal had been approved by both of their boards, and once the deal closes, DuPont will receive a cash payment of $7.3 billion.
Once the deal is finalized, IFF’s current CEO will be in charge of running the two companies, and will also continue to be the chairman of the board. Commenting on the deal, DuPont executive chairman Ed Breen stated that, they did a thorough process that drove to the conclusion that, IFF was their best strategic partner for N&B. On its part, IFF stated that, by working together, the two companies will develop market-leading ingredients, and become a consumer solutions provider with wider capabilities to meet ever-changing market needs.
IFF also added that, the deal will be done using the Reverse Morris Trust, a highly efficient tax structure. Under this structure, merging companies are able to go around the heavy tax bill that follows such deals. It works by spinning off a unit, while at the same time merging it with a different company.
At Friday’s close, IFF was trading at between $133.46 and $135.68 before closing the day at $133.98. Volumes in the day stood at 825.23k.
On its part, DuPont traded between $64.61 and $66.73 before closing the day at $64.80. Volumes in the day stood at 5.08 million.
About the two companies
DuPont de Nemours is a material, and ingredients company based in Wilmington, Delaware. IFF is a manufacturer of flavors and fragrances for the food and beverage industry. It is based in New York, New York.