DSM and Firmenich announced another step for their combined AG

Kaiseraugst (CH) | Heerlen (NL) | Geneva (CH). (dsm / fisa) DSM and Firmenich jointly announce the launch of the Exchange Offer as part of their merger of equals to create DSM-Firmenich AG. The two companies will hold (have held …) a joint webcast for analysts and investors to provide an update on the progress made so far as well as a trading update for Firmenich for the period July to September 2022.

Geraldine Matchett and Dimitri de Vreeze, Co-CEOs of DSM, commented: «We are entering the exciting next phase as we look to bring together DSM and Firmenich’s complementary capabilities, likeminded and passionate people, and unite the heritages of two great and historic companies. DSM-Firmenich is set to become the leading creation and innovation partner in nutrition, beauty and well-being, capable of delivering enhanced growth and shareholder value creation through strong growth synergies, as well as an enhanced customer offering and an even greater positive impact across the world.»

Gilbert Ghostine, CEO of Firmenich, added: «This merger is a transformational moment for the history of both businesses. DSM-Firmenich will be a global-scale partner, uniquely positioned to anticipate and better address the evolving needs of consumers by unlocking opportunities for our customers, and our people. Our two companies have an unrelenting commitment to their role in society with ESG at the core of everything we do, and I firmly believe that DSM-Firmenich will have a positive and measurable impact on people, climate and nature.»

Key takeaways

  • The AFM has approved the Offering Circular, enabling the Company to formally launch the Exchange Offer as part of the merger of equals between DSM and Firmenich to create DSM-Firmenich.
  • The Acceptance Period begins at 09.00 hours CET on 23 November 2022 and expires at 17:40 hours CET on 31 January 2023, unless extended.
  • Under the Exchange Offer, the DSM Shareholders will be entitled, subject to certain terms and conditions, to exchange each DSM Ordinary Share they hold for one newly issued DSM-Firmenich Ordinary Share (the Offer Consideration).
  • Following the transfer of the DSM Ordinary Shares tendered under the Exchange Offer against payment of the Offer Consideration (Settlement) and the Admission, all issued and outstanding ordinary shares in the capital of Firmenich will be contributed to the Company against payment of an amount in cash and the issuance of DSM-Firmenich Ordinary Shares (the Firmenich Contribution) (together with the Admission and the Exchange Offer referred to as the Transactions) to establish DSM-Firmenich, which will be a new, dynamic creation and innovation partner in nutrition, beauty and well-being.
  • The managing board of DSM and the supervisory board of DSM (the DSM Boards) unanimously support the Transactions and recommend the Exchange Offer to the DSM Shareholders for acceptance. The board of directors of Firmenich unanimously supports and recommends the Transactions. The Firmenich shareholders have approved the Transactions.
  • DSM issued a position statement setting out its position on the Exchange Offer (the Position Statement) and a convocation notice (including the agenda and explanatory notes thereto) to the DSM Shareholders (the DSM Convocation Notice) in relation to the extraordinary general meeting of the DSM Shareholders (the DSM EGM) on 23 January 2023, at which the Transactions, including the Exchange Offer, will be discussed and the DSM Shareholders will be requested to vote in favour of, amongst other things, approving the Transactions. The Position Statement and the DSM Convocation Notice are available on www.creator-innovator.com.
  • Additional material on this announcement and the Transactions can be found on the transaction website: www.creator-innovator.com.

With reference to the press releases by DSM and Firmenich dated 31 May 2022, 13 June 2022 and 28 June 2022, and the publication of the Offering Circular today, the Company, DSM and Firmenich jointly announce that the Company is making a recommended exchange offer to all DSM Shareholders to acquire their DSM Ordinary Shares in exchange for the Offer Consideration. Terms not defined in this press release will have the meaning as set forth in the Offering Circular.

Transaction highlights

  • DSM and Firmenich entered into a business combination agreement to establish DSM-Firmenich, a new, dynamic creation and innovation partner in nutrition, beauty and well-being through a merger of equals (the Merger).
  • The Merger is to be effected through the Exchange Offer and the Firmenich Contribution.
  • The business operations of the Company and its affiliates (DSM-Firmenich) will be organized in four businesses, being Perfumery and Beauty, Food and Beverage / Taste and Beyond, Health, Nutrition and Care and Animal Nutrition and Health, each with strong market positions and well-established to address emerging consumer trends.
  • DSM has undertaken to procure that each member of the DSM Boards will tender their DSM Ordinary Shares directly or indirectly held or subsequently acquired by such member under the Exchange Offer and vote his or her DSM Ordinary Shares in favour of the resolutions with respect to the Transactions (the Transaction Resolutions) at the DSM EGM.
  • DSM has undertaken to tender under the Exchange Offer part of the DSM Ordinary Shares it holds in treasury.
  • The central works council and European works council of DSM (the DSM Employee Representative Bodies) have been informed about the Transactions, including the Exchange Offer, and the recommendation of the DSM Boards. The central works council has given a positive advice.
  • The Exchange Offer and the respective obligations of the Company, DSM and Firmenich to effect the Transactions, and for DSM to ensure that the Company effects the Transactions and declares the Exchange Offer unconditional, is subject to the fulfilment of the conditions as set out in the Offering Circular (the Transaction Conditions).
  • The Exchange Offer is subject to a minimum acceptance level of 95 percent of DSM’s aggregate issued and outstanding ordinary share capital as at the Acceptance Closing Date. This percentage will be automatically adjusted to 80 percent of DSM’s aggregate issued and outstanding ordinary share capital as at the Acceptance Closing Date if the Transaction Resolutions have been adopted and are in full force and effect on the Acceptance Closing Date.
  • Completion of the Transactions is currently expected in Q1 2023.
This joint press release by Koninklijke DSM N.V. (DSM), Firmenich International SA (Firmenich) and Danube AG, to be renamed DSM-Firmenich AG (the Company), is an advertisement relating to the intention of the Company to proceed with the Exchange Offer and the Admission. The complete and very detailed version of this release is available on the corporate website www.creator-innovator.com.

Strategic rationale

The Merger will bring together Firmenich’s industry-leading Perfumery and Taste businesses and associated co-creation capabilities, with DSM’s Health and Nutrition portfolio and renowned scientific expertise.

The successful track-records of DSM and Firmenich of investing in and delivering ground-breaking innovations that create and reshape markets for growth will be combined in DSM-Firmenich. DSM-Firmenich will operate at the highest safety and quality standards, with strong regional manufacturing presence ensuring supply continuity, resilience and trust for its customers.

DSM-Firmenich will be well positioned to accelerate growth by addressing shifts in consumer preferences and customer needs driven by global trends such as climate change, accessible nutrition, inequalities, and hygiene and sanitation. These shifts drive consumer preferences for health and sustainability benefits whilst enjoying superior experiences in areas such as taste and fragrance. As a market-leader with enhanced creation and application capabilities, DSM-Firmenich will be able to serve both global and local customers, informed by local consumer preferences, across regional and local hubs around the world. Opportunities from new pioneering and complementary digitally-powered business models will build upon the 125+ year heritages of each DSM and Firmenich in purpose-led scientific discovery and innovation.

DSM-Firmenich will also bring together DSM’s and Firmenich’s relentless commitment to sustainability and traceability across the value chain, and in doing so help to drive environmental, social and governance leadership globally. Sustainability considerations have long been embedded within both DSM’s and Firmenich’s strategies and DSM-Firmenich will bring together two companies with shared values and longstanding action on climate change, embracing nature and care for people.

The compelling strategic rationale for this Merger is further supported by the opportunity to accelerate growth, delivering earnings accretion and long-term value to all stakeholders.

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