Symrise Drops on Potential Capital Hike for Diana Deal

Symrise AG (SY1) shares dropped as much as 5.7 percent in Frankfurt trading as the German maker of flavors and fragrances considers a capital increase to finance the planned 1.3 billion-euro ($1.8 billion) purchase of French competitor Diana Group.

“It will probably come to a 10 percent capital increase,” Symrise Chief Financial Officer Bernd Hirsch told journalists on a conference call today. Asked whether the move may raise about 400 million euros, given Symrise’s market valuation of 4.1 billion euros, he said that it wouldn’t be “too far away.”

Symrise on April 12 said it agreed to buy Diana to close the gap on larger rivals Givaudan SA (GIVN) and International Flavors & Fragrances Inc. (IFF) The deal is predicted to be completed in the third quarter, according to Holzminden, Germany-based Symrise.

The Diana deal allows Symrise Chief Executive Officer Heinz-Juergen Bertram to acquire one of a limited number of larger targets in the flavors and fragrance industry to accelerate growth and access natural raw materials. The purchase of Vannes, France-based Diana also adds a pet-food additives business whose earnings are more resilient to the ups and downs of consumer spending.

Symrise dropped as much as 2.03 euros to 33.82 euros, the biggest intraday decline since October, and was down 2.1 percent as of 12:34 p.m. in Frankfurt.

Pet Food

Diana’s offering spans food additives based on natural vegetable and animal-based products and colorings used in beverages, sweets and sauces. It’s expanded into the nutraceutical market, where nutrition and ingredients are formulated to try to prevent and combat diseases. Last month, Diana agreed to collaborate on cancer research with the Oregon Translational Research and Development Institute, providing expertise on plant cell cultures.

The combined business will have pro-forma sales of nearly 2.3 billion euros, Symrise said. Market leader Givaudan of Switzerland generated the equivalent of 3.6 billion euros in sales last year, according to Bloomberg data.

The flavors and fragrance industry is dominated by four leaders, a group that includes closely-held Firmenich International SA of Switzerland.

Another forthcoming opportunity for flavors and fragrance companies may be Wild Flavors GmbH. Owner Hans-Peter Wild and buyout firm KKR & Co. are exploring strategic options including a sale of the maker of flavorings for food and beverages, people with knowledge of the matter said in January.

To contact the reporter on this story: Sheenagh Matthews in Frankfurt at

To contact the editors responsible for this story: Simon Thiel at Robert Valpuesta

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