May 7, 2018 / 6:28 AM / a year ago

IFF to buy Israel's Frutarom for $7.1 bln in cash, stock

JERUSALEM, May 7 (Reuters) - International Flavors & Fragrances Inc. agreed to buy Israeli flavours and ingredients maker Frutarom for $7.1 billion in a cash and stock transaction that would create the leader in the sector, the companies said on Monday.

Under the deal, which has been approved by both boards, Frutarom’s shareholders will receive for each Frutarom share $71.19 in cash and 0.249 per share of IFF common stock for a total value of $106.25 per share.

IFF, which is paying an 11 percent premium to Frutarom’s May 6 close, also will assume Frutarom’s net debt while the two companies will have combined revenue of $5.3 billion in 2018.

IFF and Frutarom said they expect to realise some $145 million of cost synergies by the third full year after closing, with about 25 percent achieved in the first full year. The deal is expected to be neutral to adjusted cash earnings per share in the first year and double-digit accretive to adjusted cash earnings per share in the second year.

Reporting by Steven Scheer Editing by Tova Cohen

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