In another chapter of the ever-growing story of Israeli tech and business expanding across the globe, the New York-based International Flavors & Fragrances (IFF) announced on Monday that it will be purchasing the Haifa-based Frutarom Industries for $7.1 billion, to be paid two thirds in cash, and the other third in stock. The final price represents an 11 percent premium on Frutarom’s closing value.

Founded in Haifa in 1933, Frutarom began by creating herbal and fruit essences using local produce, exporting nearly all of its stock. Employees would also spend Tu B’Shevat, the Jewish new year’s day for trees, planting trees and bushes in the factory’s yard, and would spend an additional day a year on a joint nature hike. The company soon grew, however, itself purchasing 32 other companies in the last six years alone.

IFF made $3.4 billion in profits last year, with Frutarom just under half that. With the acquisition of Frutarom, IFF is expected to become the second-largest flavor corporation globally, tied with the German Symrise, and behind the Swiss-based Givaudan, which last year reported $5.3 billion in revenue. Both competitors have also been on an acquisition spree this past year, with Givaudan buying Naturex for $1.3 billion and Symrise buying Diana Ingredients for $2.2 billion.

Frutarom, with over 20000 products and distribution to 120 countries, and customers such as Nestle, Coca Cola, and Unilever, made 22 deals in just the past two years, such as the Irish Redbrook and Russian Protein Technologies, increasing its stock value by 80 percent. In a joint statement, the company announced that it will retain offices in Israel for at least the next three years, after which it will become an IFF subsidiary. Shareholders of Frutarom will receive $106.25 per share, comprising $71.19 cash and 0.249 per IFF stock.

The deal has been approved by boards of both companies, and will be the second-largest deal in Israel’s history after Mobileye was purchased by Intel for $15 billion in 2017.





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