Annual Sales of $14.7Bn, One of the Largest Mergers of Cosmetics Raw Materials
- Chaileedo Press
- May 9, 2023
- 4 min read
The combination of two century-old enterprises has opened a new journey.
Today (May 9th), DSM-Firmenich announced that it has successfully completed the merger and become one of the world's largest innovative companies in the fields of nutrition, health, and beauty.
Dimitri de Vreeze, Co-CEO of the DSM-Firmenich global alliance, said, "The alliance of two great companies with a century of groundbreaking scientific research marks the beginning of a new journey. DSM-Firmenich will leverage its unique scientific expertise to unlock innovative possibilities that meet the personal desires of consumers, fulfill basic needs of the masses, and do not come at the expense of the planet. DSM-Firmenich is a truly global enterprise with proven scientific expertise and a wealth of nutrition, flavor, and fragrance solutions. We will position ourselves as innovators in the areas of nutrition, health, and beauty and work together to pursue a better future as we embark on this new journey."
According to public information, DSM Group is an international nutrition, health, and materials company whose products are widely used in end products such as food and health supplements, personal care products, pharmaceuticals and medical devices, and animal feed. Firmenich is Switzerland's largest company in the research and production of fragrance ingredients, with its fragrances and flavors widely used in cosmetics, perfumes, and food.
The Road to Merger
The merger of two giant companies has been a long journey.
On May 31, 2022, DSM and Firmenich announce that they have entered into a business combination agreement (the "BCA") to establish the leading creation and innovation partner in nutrition, beauty and well-being ("DSM-Firmenich"). The combination will bring together Firmenich's unique leading Perfumery and Taste businesses, its world-class science platforms and associated co-creation capabilities with DSM's outstanding Health and Nutrition portfolio and renowned scientific expertise.
On November 22, 2022, the AFM has approved the Offering Circular, enabling the Company to formally launch the Exchange Offer as part of the merger of equals between DSM and Firmenich to create DSM-Firmenich.
After that, DSM and Firmenich jointly announce that they have obtained the unconditional competition clearance from the European Commission on 22 February 2023. This follows the unconditional competition clearance of China's State Administration for Market Regulation (SAMR) received on 16 February 2023. Consequently, competition clearance has been obtained in nine out of the ten jurisdictions required to satisfy the offer condition relating to competition clearances.
The two companies stated that the DSM-Firmenich merger will further accelerate industry innovation and bring new growth opportunities to customers. DSM-Firmenich will form a new global-scale partnership. According to the company announcement, after the merger of Firmenich and DSM, there will be four divisions, including Perfumery & Beauty, Food & Beverage / Taste & Beyond, Health, Nutrition & Care, and Animal Nutrition & Health.
One of the largest mergers in the beauty industry
At the formation of DSM-Firmenich, DSM shareholders will hold 65.5% of the new company, while Firmenich shareholders will hold 34.5%, in addition to €3.5 billion ($3.844 billion) in cash provided by DSM.
In 2021, DSM had a total revenue of €7.3 billion ($8.017 billion) and Firmenich had a total revenue of €4.2 billion ($4.612 billion), resulting in a combined revenue of €11.4 billion ($12.52 billion). In the first half of 2022, DSM had a total revenue of €4.1 billion ($4.503 billion) and Firmenich had a total revenue of €2.4 billion ($2.635 billion), resulting in a combined revenue of €6.5 billion ($7.138 billion).
CHAILEEDO find that, DSM's sales in the 2022 fiscal year were 8.39 billion euros (9.214 billion U.S. dollars). Meanwhile, Firmenich's revenue reached 4.922 billion Swiss francs (5.52 billion U.S. dollars). This means that the combined annual sales of the two companies are approximately 14.7 billion U.S. dollars, and the new company will become the world's leading enterprise in the field of fragrances and flavors, which is the largest merger case in the cosmetics raw materials industry in 2022.
Firmenich's perfume and ingredient business will be merged with DSM's personal care and aroma businesses, further expanding the market share of the two companies in the beauty market. The merged Perfumery & Beauty division will be a leader in the fragrance ingredients industry and will have advanced technologies such as renewable, natural, and biodegradable options.
Thomas Leysen, chairman of the DSM supervisory board, said, “DSM-Firmenich will bring together leading creativity and cutting-edge science and innovation. Together we will be able to better serve the needs of customers and deliver compelling growth and returns.”
Patrick Firmenich, chairman of Firmenich, said, “The combination of DSM and Firmenich is transformational, and brings together two culturally aligned and iconic businesses, each with over 125 years’ heritage of innovation. Our shared purpose and common values, combined with our highly complementary capabilities gives me confidence we can accelerate our growth further through innovation and new creations.”
DSM-Firmenich to empower women's nutrition and health in China
DSM-Firmenich announced their first long-term commitment in China during a press conference, called the "DSM-Firmenich Together for Her Health and Beauty" program. The program aims to empower Chinese women's nutrition and health needs, improving their overall wellness and beauty, and enhancing their family's dietary and health literacy.
"We will embark on a new journey with a brand-new image. Taking advantage of the vast opportunities brought by China's '14th Five-Year Plan', we will adhere to the concept of 'Innovating for China', and deepen and optimize our development in China based on our four highly complementary business capabilities, contributing outstandingly and positively to the food, nutrition, and beauty and health industries in China," said Zhou Tao, President of DSM-Firmenich China. "While focusing on our own steady development, we are also committed to working with our Chinese partners to promote the health and well-being of Chinese residents and create social value.”
At the event, DSM-Firmenich China announced a partnership with the China Rural Development Foundation to launch the "She for Home - Children's Companion Mothers" project, the first project under the "DSM-Firmenich Towards Beauty and Common Development Plan".
This marks the official launch of DSM-Firmenich's long-term commitment to empower Chinese women's nutrition and health. The project will provide online and offline health and nutrition training courses to improve the nutritional level and health awareness of rural women, including Children's Companion Mothers, helping them better care for and protect rural children, and become participants, builders, and beneficiaries of rural revitalization. The project is expected to cover 200,000 women and children nationwide.
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