International Flavors & Fragrances Inc. (IFF) will acquire Israel-based flavor firm Frutarom for $7.1 billion.
The cash and stock transaction — unanimously approved by both companies’ boards of directors — also includes Frutarom’s net debt.
By combining with Frutarom, IFF is accelerating its Vision 2020 strategy to create a global leader in taste, scent and nutrition. The combination unites two industry-leading companies with complementary customers, capabilities and geographic reach, resulting in more exposure to fast-growing end markets and an enhanced platform to deliver sustainable, profitable growth. The combined company’s customers will have access to comprehensive solutions with increased focus on naturals and health and wellness.
With production and development centers on six continents, Frutarom markets and sells more than 70,000 products to more than 30,000 customers in over 150 countries. Frutarom is primarily focused on natural products, which drive more than 75 percent of its sales. 
Frutarom mainly serves local and mid-size customers and has a presence in fast-growing adjacent and complementary categories such as natural colors, health and beauty ingredients, natural food protection and enzymes. Frutarom has a strong track record of growth, with expected sales of above $1.6 billion in 2018, and their previously announced target of $2.25 billion in sales by 2020.
IFF Chairman and CEO Andreas Fibig described the merger as a “big win” for shareholders, customers and both companies’ employees.
“Frutarom has an extremely attractive product portfolio, including broad expertise in naturals and diverse adjacencies with capabilities beyond our core taste and scent businesses,” he said. “It also has significant exposure to complementary and fast-growing small- and mid-sized customers. By combining our deep R&D expertise with Frutarom’s, we are offering our customers a broader range of solutions and accelerating our growth strategy.”
Frutarom President and CEO Ori Yehudai noted the company has experienced “accelerated growth” through investment in unique technologies and a focus on natural products.
“We are extremely excited to combine Frutarom with IFF and together create global leadership in natural taste, scent and nutrition,” he said. “The growth potential for the combined company is substantial and our shareholders will continue to enjoy this upside.”
Frutarom’s shareholders will receive  $71.19 in cash for each share and 0.249 of a share of IFF common stock, which, based on the 10-day volume weighted average price for IFF’s common stock for the period ending May 4, represents a total value of $106.25 per share.