Israeli company sold in staggering $7.1 billion deal

Israeli flavor and ingredient producer Frutarom will be acquired by American firm International Flavors & Fragrances Inc. (IFF) in a deal worth approximately $7.1 billion, the two companies announced Monday.

The deal represents the second or "exit" of an Israeli company to date, only surpassed by Intel‘s purchase of Mobileye for $15.3 billion in 2017.

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Based in the northern Israeli city of Haifa, Frutarom develops and manufactures flavors and ingredients for the food, flavor, fragrance, pharmaceutical and cosmetic industries. The company employs approximately 2,700 employees worldwide and sells over 70,000 products to more than 30,000 customers in over 150 countries.

Founded in 1958, IFF, an American corporation producing flavors and fragrances for the food, fragrances and household products industries, will acquire Frutarom in a cash and stock transaction.

The Israeli company, which produces primarily natural colors and ingredients, expects sales of over $1.6 billion in 2018, and sales are expected to rise to $2.25 billion by 2020.

"This transaction is a big win and a fantastic outcome for shareholders, customers and employees of both companies," said IFF Chairman and CEO Andreas Fibig, announcing the deal on Monday.

"We have long admired Frutarom and have a great deal of respect for its team and all of its dedicated and talented employees around the globe. We look forward to welcoming Frutarom to the IFF family," added Fibig.

The acquisition forms part of IFF‘s "Vision 2020" strategy to become a global leader in the taste, scent and nutrition industries, said the company.

Under an agreement reached by the Boards of Directors of both companies, Frutarom‘s shareholders will receive for each Frutarom share $71.19 in cash and 0.249 of a share of IFF common stock, representing a total value of $106.25 per share.

"Today marks the culmination of a decades-long vision to become a global leader in taste and health," said Ori Yehudai, President and CEO of Frutarom.

"Frutarom and IFF are committed to maintaining a presence in Israel, and I look forward to working with Andreas and the team to ensure a seamless integration of these two terrific companies."

Yehudai will serve as strategic advisor to Fibig following the close of the transaction, with IFF‘s company headquarters remaining in New York but maintaining a presence in Israel.

The growing company will be listed on both the New York and Tel Aviv stock exchanges.