HEERLEN, THE NETHERLANDS — Royal DSM has entered into an agreement to merge with Firmenich, Geneva, Switzerland. Once the companies are combined, shareholders of Royal DSM will own 65.5% of the business while shareholders of Firmenich will own 34.5% of the business and receive €3.5 billion ($3.7 billion) in cash.

Founded in 1895, Firmenich is one of the largest privately owned companies in the fragrance and flavor markets. DSM-Firmenich will have four business units — perfumery and beauty, food and beverage, health and nutrition, and animal nutrition — with combined sales of approximately €11.5 billion ($12.3 billion). The combined companies will employ 28,000 and be headquartered in Switzerland.

The business units will be based in both The Netherlands and Switzerland with perfumery and beauty, health and nutrition, and animal nutrition in Switzerland and food and beverage in The Netherlands. The company biotechnology research arm also will be based in The Netherlands, according to the companies.

“DSM-Firmenich will bring together leading creativity and cutting-edge science and innovation,” said Thomas Leysen, chairman of DSM. “Together we will be able to better serve the needs of customers and deliver compelling growth and returns. However, successful mergers require more than complementary capabilities or compelling financials; they not only require balanced governance and a respect of the interests of all stakeholders, but they crucially require shared values. My colleagues and I are convinced we have all of those elements, and it is for this reason that the supervisory board of DSM concluded that this is truly a merger which is in the interest of all stakeholders.”

Geraldine Matchett and Dimitri de Vreeze, currently the co-chief executive officers of DSM, will lead DSM-Firmenich as co-CEOs.

“Together, DSM-Firmenich will enjoy complementary capabilities, including one of the largest creation communities in the industry, enabling us to unlock new opportunities for customers as well as position us to deliver enhanced long-term growth and shareholder value, sustainably,” they said. “By coming together, we will establish a company where anyone, anywhere in the world, wishing to make a positive impact should aspire to work.”

The transaction is expected to be completed during the first half of 2023.

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