Chr Hansen divests flavor activities

By Chris Jones

- Last updated on GMT

Related tags: Flavors, North america, Flavor, Chr hansen

Denmark's Chr. Hansen is to sell of its US-based flavor activities
to Germany's Symrise group in order to focus more on its higher
added-value operations.

The company's flavors business, which includes the seasonings (spice blends), savory, sweet and dairy flavor unit, had sales of US$70m in 2007, with the vast majority (80 percent) of turnover generated in North America. According to Chr. Hansen, selling the unit will allow its flavor customers to "benefit from the global infrastructure and technical expertise Symrise offers as one of the leading global flavor companies"​. "With its capabilities, Symrise will be able to better leverage the growth potential of the Chr. Hansen flavor portfolio,"​ a spokesman for Chr. Hansen told FoodNavigator-USA.com. "Symrise is a specialist within this field, a more focused player on flavors and fragrances." ​ The spokesman added that the sale was also in line with the consolidation in the global flavors market over the last few years, which has already seen deals such as Givaudan's takeover of Quest and Frutarom's purchase of Jupiter Flavours, among others. Symrise said the deal would "strengthen the company's current position on what is the largest domestic market for flavors in the world"​. It will in fact double the German group's flavor operations in North America, giving it "the critical mass, and an experienced sales force, in the US,"​ a spokeswoman for the company told FoodNavigator-USA.com. The businesses sold by Chr. Hansen are based in Mahwah, NJ, Elyria, OH and Milwaukee, WI, and have been part of the Danish group's business for many years. They sell flavors to a wide range of US customers, including both packaged food producers and food service groups. The decision to sell the units is part of Chr. Hansen's ongoing strategic refocus, which has seen the group concentrate on more added-value areas such as enzymes and dairy cultures, as well as potentially lucrative health ingredients such as probioitic cultures. The company stressed, however, that the sale of the flavors business would not mean an end to its operations in the US. "We are certainly not leaving theUS,"​ the spokesman said. "We still make more than 25 percent of our turnover from theUSmarket, so it is an important place for us."​ The final deal, the price of which was not disclosed, is subject to regulatory approval by the US anti-trust authorities. The spokesman said the two companies considered approval "a formality"​, but nonetheless one that needed to be respected. "The deal is not closed until it is closed,"​ he said. Symrise had flavor and nutrition sales of €603.2m ($921.6m) in 2007, while pre-tax earnings from the unit were €137.4m ($210m), increases of 5.8 and 21.6 percent respectively compared to 2006. The company said the strong result for flavors was due to an increase in sales, with its Taste-for-Life range, intended to allow for less sugar, salt and fat without impairing taste, aiding the performance of its sweet and savoury divisions. According to Leffingwell and Associates, the global flavors and fragrance market is worth an estimated $19.9bn. Flavors are thought to make up just under half of this, and North America to account for just over a third. This article has been amended from the original, which erroneously stated that Chr Hansen's flavors business reported sales of US$17m in 2007. The correct figure is US$70m. We apologise for any inconvenience arising from this error.

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