International Flavors & Fragrances agreed to sell its food ingredients business to CVC Capital Partners in a deal that values the unit at about $4.3 billion, as the flavor maker trims its portfolio to boost profitability.
The flavor maker said it will now sharpen its focus on fragrances and health businesses, as consumer spending on health and wellness remains resilient.
The company said it has divested 13 non-core businesses over the last several years and raised about $10 billion in gross proceeds to help reinvest in its higher-margin businesses.
IFF expects to receive about $3.8 billion upon closing the sale of its food ingredients unit, and said the proceeds will be directed toward debt reduction, share buybacks and reinvestments.
The company also said it will retain a 10% stake in the business, which makes emulsifiers, sweeteners and pastes. It was IFF’s largest unit by revenue as of December 31, 2025, according to its annual report.
“We believe the sale represents the final major step in IFF’s transformation journey,” said Kristen Owen, analyst at Oppenheimer.
IFF’s shares were up about 2% on Friday. The company has a market capitalization of about $19.9 billion, according to LSEG data.
The company sold its pharma solutions business to French plant-based ingredients maker Roquette last year, in a deal valued at $2.85 billion. It also sold its soy protein concentrates business to agribusiness company Bunge earlier this year.
Packaged food companies, which are major customers of IFF, are also streamlining businesses as shoppers trade down or opt for healthier alternatives. The growing adoption of appetite-suppressing weight-loss drugs is also changing food habits.
Frank’s RedHot sauce maker McCormick agreed to merge with Hellmann’s mayonnaise owner Unilever’s food business in April. Days later, Unilever said it would buy U.S.-based nutritional supplements brand Grüns.
The IFF deal is expected to close at the end of the second quarter of 2027.
Source: Reuters.com