Symrise to Acquire Diana Group For $1.8 Billion

HOLZMINDEN, Germany—Symrise AG has entered into a binding offer to acquire Diana Group, a supplier of natural functional solutions for the food, pet food, nutraceuticals, aquaculture and cosmetics industries for $1.8 billion (€1.3 billion). The transaction will boost Symrise’s position in the flavor and nutrition market and broaden its activities into the lucrative global animal nutrition and pet food market.

The deal is expected to close in third quarter 2014. Upon completion, Symrise will become the third largest flavors and scents company in the world, up from the No. 4 spot. Currently, Givaudan SA and International Flavors & Fragrance, Inc., hold the top two spots, respectively.

The acquisition will create a highly competitive platform that will allow Symrise to capitalize on market opportunities at an accelerated pace, intensify business with global key accounts and consumer goods companies and gain additional market share.

Diana has become one of the leading suppliers of organoleptic solutions based on natural ingredients. Diana is a world leader in natural and functional food solutions and palatability enhancers for pet food and works alongside clients to increase the sensorial and nutritional performance of their products.

Based in Vannes, France, Diana operates production facilities and sales offices in 23 countries in Europe, North America, Latin America and Asia. The company has more than 2,000 employees and generated €425 million in 2013. The combined business will have pro-forma sales of nearly €2.3 billion.

“The proposed acquisition represents a major milestone for Symrise right after our 10th anniversary, and is fully in line with our strategic objective to further accelerate profitable growth. Diana Group is an impressive and highly profitable business with a strong complementary fit to our activities in the flavor and nutrition market," said Symrise AG CEO Dr. Heinz Jürgen Bertram. “With Diana we will be able to significantly diversify our portfolio for natural ingredients, tap into new business segments, strengthen our raw material supply and meet the requests for traceability from our customers."

FPD’s Take:

Symrise will enhance Diana’s regional presence in key growth regions, while Diana will benefit from Symrise’s strong R&D capabilities in flavors, consumer health and life essentials, which will advance innovations in these key business segments. Over the past seven years, Diana has become a world leader in natural food solutions and palatability enhancers for the pet food market. The union will provide Symrise with a diversified portfolio that will include the very lucrative pet food market, one is which ingredient suppliers play an important role.

From sourcing to “human grade" ingredients, the lines between human nutrition and high-quality pet food continue to blur. In fact, a recent free Digital Issue from SupplySide Animal Nutrition Insights explored the rapidly-growing pet food market and found there is a strong focus on ingredients, including product formulations boasting more “real" or “whole" ingredients; fresh meat, poultry or fish as the No. 1 ingredient; whole grains or no grains; fruits and vegetables; trendy functional ingredients such as flaxseed and cranberries; made in the United States claims; and limited numbers of ingredients.

Need more proof big companies are banking on the pet food nutrition market? In January 2014, Nestlé S.A. announced it was investing $1 billion in Mexico to build an infant nutrition factory and pet food factory. And in October 2013, Del Monte Foods sold off its Consumer Products business to Del Monte Pacific Limited (DMPL) for $1.675 billion to allow Del Monte Foods’ Pet Products business to focus on capturing growth in expanding $20 billion pet food and snack market.