In July 2019, Givaudan (SWX: GIVN), the global leader in flavours and fragrances, announced its plan to acquire Drom to extend its leadership in the global fragrance market further. While the terms of the deal have not been disclosed yet, on a proforma basis, Drom’s business would have represented nearly EUR 110 million of incremental sales to Givaudan’s results in 2018.
Givaudan has planned to fund the transaction from its existing resources. While the transaction is expected to close in the third quarter of 2019, the divestiture remains subject to regulatory approvals.
Givaudan, a Swiss manufacturer of flavours, fragrances, and active cosmetic ingredients, is the global leader in the creation of flavours and fragrances. In close collaboration with food and beverages, consumer product, and fragrance partners, Givaudan manufactures tastes and scents that delight consumers all around the world. The company achieved a sale of CHF 5.5 billion in 2018. The company is headquartered in Switzerland and has a local presence in over 145 locations.
The global flavours and fragrances market continues to show a healthy growth rate across the various regions. The total global market reached a value of around USD 27.5 billion in 2018 and is further expected to reach approximately USD 36.5 billion by 2024, growing at a CAGR of 5% between 2019 and 2024. With the increase in the disposable incomes of people and increased awareness about hygiene and personal care, especially in developing nations, the market is witnessing a rapid growth. Givaudan, IFF, Firmenich, and Symrise continue to occupy the top four positions in the global flavours and fragrances market. In 2017, the combined sales of compound flavours and fragrances of all four companies represented around 44% of the global market.
Drom is a global perfume house which was founded in 1911. It creates fragrances for consumer products and provides fine fragrance to customers across the world. Drom, having manufacturing facilities in China, Germany, the USA, and Brazil, is headquartered near Munich in Germany. The company is one of the world´s top ten fragrance suppliers.
Givaudan’s acquisition of Drom, a pure fragrance company, will further assert its leadership position in the fragrance market worldwide, and this acquisition is fully in line with the company’s strategic ambitions. Both companies have a long heritage in fragrance creation, and it seems like Drom’s capabilities and strong culture will positively impact the company in its future endeavors. The combined skills, experience, and expertise of both the companies will provide a compelling and valuable proposition, further benefitting their customers across all segments.
Being passionate about perfumery, Givaudan has combined creativity and innovation to develop pleasant fragrances. With the industry’s largest perfumery unit, Givaudan produces the best range of fragrances for its customers. The company strives to deliver fragrances for prestige and designer perfumes, personal care, home as well as laundry care. Moreover, the sustainable approach of the company creates a balance of economic success with social responsibility, which makes it one of the most successful producers, globally.
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