In recent years, the food ingredients sector has witnessed a series of significant mergers as companies seek to enhance their capabilities and expand their market presence. The latest agreement between Novozymes and Chr. Hansen not only establishes a formidable entity in the ingredients market but also marks the largest merger in Danish history. This new company is poised to hold a substantial position in the biotechnology ingredients sector, with projected annual revenues of €3.5 billion (approximately $3.72 billion). It will operate 38 research and development and application centers worldwide, along with 23 global manufacturing facilities and a workforce exceeding 10,000 employees.
While both Novozymes and Chr. Hansen engage in sectors beyond food ingredients, around half of the new company’s portfolio will concentrate on “enabling healthier lives and producing better foods,” according to the announcement of the merger. The leadership structure will remain intact, with Novozymes CEO Ester Baiget maintaining her position and CFO Lars Green overseeing financial operations.
The merged entity will leverage Novozymes’ extensive expertise in enzyme applications for processing meat, fruits, juices, baked goods, and alcoholic beverages, while also offering a diverse range of natural cultures for yogurt, cheese, and food preservation from Chr. Hansen. Although this company may not fulfill all the ingredient needs of food industry clients, it will serve as a one-stop shop for natural chemical processes aimed at enhancing taste, performance, nutritional value, and shelf life across various products.
In recent years, Chr. Hansen has streamlined its operations, potentially in anticipation of this acquisition. Notably, the company divested its natural colors division, now known as Oterra, to private equity firm EQT IX for €800 million ($940 million) in 2020. This merger represents the second major consolidation of ingredient companies announced this year.
In June, Dutch chemicals giant Royal DSM revealed its plan to merge with Swiss ingredients manufacturer Firmenich, combining DSM’s texturizing and dairy ingredients with Firmenich’s plant-based solutions and sugar reduction technologies. This $21 billion deal is still awaiting regulatory approval and is expected to finalize in the first half of 2023.
The most substantial recent transaction in the ingredients sector occurred in 2021, when International Flavors & Fragrances (IFF) merged with the former DuPont Nutrition & Biosciences. Valued at $26.2 billion, this merger established a major hub for a wide array of ingredient and food technology solutions, with IFF actively working on integrating the former DuPont operations.
Additionally, as the industry evolves, questions about ingredient safety have emerged, such as whether calcium citrate causes kidney stones. While this merger may not directly address such concerns, the combined expertise of Novozymes and Chr. Hansen could play a role in developing safer and healthier food options, potentially alleviating worries regarding various ingredients and their health implications.