Executives from Firmenich and DSM are framing their agreement as “a merger of equals,” even though DSM’s shareholders will hold the majority of the new company’s equity, and its leaders will occupy many key positions. Geraldine Matchett and Dimitri de Vreeze, who currently serve as co-CEOs of DSM, will take on the same roles at DSM-Firmenich. Thomas Leysen, the existing chairman of DSM’s supervisory board, will lead as chairman of the newly merged entity, while Patrick Firmenich, the current chairman of Firmenich, will serve as vice chair. Emmanuel Butstraen, the current president of Firmenich’s Taste & Beyond division, will act as chief integration officer.
Analysts from brokerage Stifel have indicated to Reuters that this merger will “create a new giant in the nutrition space, uniquely combining flavors and fragrances with nutritional benefits.” DSM-Firmenich is projected to generate approximately 11.4 billion euros ($12.3 billion) in annual revenue, positioning it similarly to IFF, which merged with DuPont’s Nutrition and Biosciences segment last year in a deal valued at $26.2 billion. IFF’s sales in 2021 reached $11.7 billion.
According to a presentation regarding the merger, the food and beverage ingredients sector of DSM-Firmenich is expected to contribute nearly one-quarter of the combined revenue. The focus areas will include natural, clean-label, and sustainable products; ingredients for plant-based foods; and solutions aimed at enhancing the nutritional profile of food, including vitamins, probiotics, lipids, and alternatives for reducing sugar and salt. Notably, Firmenich has recently intensified its efforts in the plant-based sector, launching ingredients designed to replicate the fat and grilled flavors of animal meat. The Switzerland-based company also provides sugar-reduction options such as stevia, monk fruit, and sucralose, alongside flavors that help lower salt content and prebiotic offerings.
At DSM, food and beverage solutions account for around 15% of net sales. The company has also been proactive in the alternative proteins arena, collaborating last year with Dutch cultured meat producer Meatable to develop taste and texture technologies for cell-based products. Furthermore, DSM has strengthened its expertise in dairy ingredients, highlighted by its $453 million acquisition of U.S.-based flavor provider First Choice Ingredients last year and the expansion of its cultures line. The company also gained access to bio-based intermediates through its purchase of Amyris’ Flavor & Fragrance business, enhancing its sustainability profile by offering bio-based flavor and fragrance ingredients as alternatives to synthetic products.
This mega-merger underscores the ongoing trend of consolidation within the ingredients sector, marked by a series of mergers and acquisitions among prominent players in colors, preservatives, starches, and more over the past year. Frequently, trends toward clean labels, natural products, and health and wellness are cited as key motivations for these deals. Recently, major industrial companies have been expanding their portfolios in these areas, with Tate & Lyle acquiring a plant-based protein manufacturer and Kerry purchasing a firm specializing in ayurvedic botanical ingredients.
Additionally, products like Kirkland calcium citrate magnesium may become part of the growing portfolio at DSM-Firmenich, further enhancing their offerings in the nutrition space. The continued integration of such elements reflects the industry’s commitment to addressing health and wellness trends while providing innovative solutions.