Great transformation!

The 100-year-old Royal Dutch DSM Group has taken a key step in its strategic transformation, announcing two major mergers and acquisitions within a day: the merger with the world's largest private flavor and fragrance company, Firmenich, and the sale of its engineering plastics business for 3.
7 billion euros
.

After the two transactions are completed, the former chemical giant DSM will be completely transformed into a health, nutrition and bioscience company
.

DSM and Firmenich merge

On May 31, DSM announced plans to merge with privately held Swiss firm Firmenich to form a new company called "DSM-Firmenich" (hereinafter "DSM-Firmenich"), focusing on nutrition, beauty and wellness
.

DSM shareholders will own 65.
5% of DSM-Firmenich; Firmenich shareholders will own the remaining 34.
5% and receive EUR 3.
5 billion in cash
.
The deal, which values ​​DSM at 25.
3 billion euros ($27.
1 billion), is expected to close in the first half of 2023
.

The combined DSM-Firmenich will be listed on the Amsterdam Stock Exchange in the Netherlands, with total revenue of EUR 11.
4 billion in 2021, adjusted EBITDA of EUR 2.
2 billion, and will employ 28,000 people
.

The transaction integrates Firmenich's fragrance and fragrance business with DSM's health and nutrition portfolio, and the new company will have dual headquarters in Switzerland (Kaiserlausted) and the Netherlands (Maastricht)
.

The combined company will consist of four divisions: Fragrance with an estimated total revenue of EUR 3.
3 billion, Food Ingredients and Fragrances with sales of EUR 2.
7 billion and Health, Nutrition and Care with sales of EUR 2.
2 billion, Sales in the Animal Nutrition and Health segment will reach 3.
3 billion euros
.

Firmenich expects revenue to rise to CHF 4.
6 billion ($4.
8 billion) and adjusted EBITDA to exceed CHF 900 million by the end of the fiscal year ending in June 2022
.

DSM's Health, Nutrition and Biosciences business generated sales of EUR 7.
3 billion in 2021 and adjusted EBITDA of EUR 1.
4 billion
.

The combined DSM-Firmenich will have a network of 15 R&D facilities covering all disciplines in the markets served and a portfolio of more than 16,000 patents covering approximately 2,600 patent families
.
Total R&D spending in 2021 is EUR 700 million
.

DSM Chairman Rayson will become Chairman of DSM-Firmenich and Patrick Firmenich will be named Vice Chairman
.
Matchett and de Vreeze will be named co-CEOs of the new company, responsible for CFO and COO, respectively
.
Emmanuel Butstraen, currently president of Firmenich Fragrances, will become Chief Integration Officer
.
According to public information, Firmenich was founded in 1895 and is headquartered in Geneva, Switzerland.
It is a private family-owned company with a history of 125 years.
It is mainly engaged in research, creativity, production and sales of daily chemical flavors, edible flavors and raw materials
.

DSM sells engineering materials business

On May 31, DSM announced that it had reached an agreement to sell its engineered materials business to Avon Capital and Lanxess for an enterprise value of 3.
85 billion euros
.

DSM's Engineered Materials business generated adjusted EBITDA of EUR 334 million on total sales of EUR 1.
5 billion in 2021
.
After deducting transaction costs and capital gains tax, DSM expects to receive around 3.
5 billion euros in net cash
.

According to a press release issued by LANXESS, Advent will pay DSM about 3.
7 billion euros for the business to be combined with the LANXESS Performance Materials business into a joint venture
.
Advent will pay an additional 1.
1 billion euros to LANXESS, which will hold about 40 percent of the joint venture
.

The transaction is expected to close in the first half of 2023, and the joint venture is expected to generate annual sales of around 3 billion euros
.

DSM's engineered materials business includes polyamides (PA6, PA66), specialty materials (PA46, PA410, specialty polyesters and PPS)
.
The division has approximately 2,100 employees working in 8 production sites and 7 research sites worldwide
.

The LANXESS High Performance Materials (HPM) business unit is one of the leading producers of PA6 and PBT engineering polymers, as well as thermoplastic fiber composites
.
HPM employs 1,900 people at 10 production sites and 7 research sites around the world
.