DSM merges with Firmenich in a 3.5 billion deal

MADRID, 31 May. (EUROPA PRESS) -

The Dutch conglomerate DSM, specialized in nutrition, pharmacy and materials, has agreed to merge with the Swiss Firmenich, whose business focuses on fragrances and flavors, in an operation that has reached 3,500 million euros, according to what both companies have indicated in a statement. .

The operation has been structured as a merger of equals. Shareholders of Firmenich, which is not listed on the Stock Exchange, will receive one DSM share for each share they hold. To compensate for the rest of the value, DSM will also pay 3,500 million euros to the shareholders of the Swiss firm.

The new merged company will continue to be listed on the Amsterdam Stock Exchange, as will DSM, while the company as such will be based in Switzerland. Current DSM shareholders will own 65.5% of the new joint venture, while Firmenich owners will hold the remaining 34.5% of the capital.

Both companies expect this operation to lead to cost savings due to synergies of 350 million euros in the adjusted gross operating profit (Ebitda) from 2026 on an annual basis. Revenue will also increase by €500 million as a result of increased innovation. The cost of the merger has been calculated at 250 million euros.

The joint revenues of both companies in 2021 exceeded 11,500 million euros. Firmenich's Ebitda margin was around 20%, while DSM's was 19%.

The forecast is that the merger agreement implies a growth in sales in the medium term of between 5% and 7% annually, as well as an annual growth in Ebitda of close to 10%. The company's objective is to raise the EBITDA margin from the current 20% to around 22% or 23% thanks to synergies.