M&A in the Flavours and Fragrances Market
The former VP explained why Givaudan is trading at a premium compared with IFF and Symrise – pointing to its acquisition of Naturex.
The key point about the acquisition is that it gives Givaudan an advantage in naturals, according to the specialist, who said: “I think this really establishes them as a true leader in that area.”
The other major players have also been on the acquisition trail, including IFF, which recently purchased Frutarom. But this has been met with concerns by investors about how the acquired company will be integrated.
Givaudan and Firmenich, both Swiss, have traditionally taken a longer-term view, while IFF, which is an American publicly-held company, has tended to take a more short-term and reactionary approach, as opposed to long term and visionary.
The industry is in a period of change, according to the specialist, as one of the key segments of the business – the fine fragrance market – “lost a bit of its lustre” globally.
Demand for natural over synthetic flavours and fragrances from consumers, and millennials, in particular, has resulted in much greater investment, research and acquisition activity in the natural space by the main four companies. The move into naturals goes beyond the taste profile, as the companies take into consideration what additional benefits they can provide to the flavours and fragrances industry.
Will IFF be able to overcome the challenges posed by its recent acquisition to maintain its position as the second major player in flavours and fragrances? In this Interview, Third Bridge Forum found out whether the acquisition of small and medium-sized companies by the four major players will help them broaden their offering and maintain their individual ranking in the market.
To access all the human insights from Third Bridge’s Flavours & Fragrances – Givaudan, IFF & Firmenich Interview, click below to view the full transcript.
The information used in compiling this document has been obtained by Third Bridge from experts participating in Forum Interviews. Third Bridge does not warrant the accuracy of the information and has not independently verified it. It should not be regarded as a trade recommendation or form the basis of any investment decision.
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