The Food and beverage M&A Event of the Year 2022: Super combination, breaking the game and reborn from Nirvana

Although 2022 is not an easy year, but as one of the only two growth industries in the 2022 Hurun World 500, the food and beverage industry still relies on its strong resilience, ushering in the dawn of confidence in carrying forward.

As a "barometer" of the market, mergers and acquisitions can not only be an "engine" for a company to promote business transformation, but also indicate the direction of the industry. In this article, we comprehensively consider the dimensions of deal size, industry influence, market attention and so on, and take stock of the top 10 mergers and acquisitions/transactions in the food and beverage industry in 2022.

(Note: The transaction amount of foreign currency data in this article is uniformly converted according to the exchange rate on January 18, 2023)

Transaction size: 3.5 billion euros (equivalent to about 25.5 billion yuan)

Disclosure date: May 2022

On May 31, 2022, DSM DSM and Firmenich announced that they have entered into a business combination agreement (BCA), which will see the two companies embark on a new journey with DSM-Firmenich.

The deal is the largest in the global food space since IFF bought DuPont's nutrition business for $26.2 billion in 2019.

The merger of DSM and Firmenich is expected to be completed in the first half of 2023. Following the merger, DSM shareholders will own 65.5% of the new company, with Firmenich owning the remaining 34.5% and receiving €3.5 billion in cash.

Founded in 1902 as a mining company, DSM has gradually transformed itself into a health, nutrition and scientific biogiant. Firmenich was founded in 1895 and is now the world's largest privately held fragrance and fragrance company.

"A merger is like a marriage, it requires both parties to share common values. [1] The combination of Firmenich and DSM will create, create and innovate partnerships together in the areas of nutrition, beauty and health.

The combined DSM-Firmenich is expected to achieve sustainable growth of 5-7% per annum over the medium term. At the same time, driven by innovation, the interim adjusted EBITDA margin is 22-23% and annual revenue is expected to increase by approximately 500 million euros.

These two century-old ingredient giants hand in hand, will have a profound impact on the food industry?

On December 12, 2022, Denmark welcomed the largest deal ever, Novozymes (Novozymes) and Chr.Hansen (ChR.Hansen) entered into a merger agreement, expecting to create a leader in biological solutions through the merger. The merger is expected to close in the fourth quarter of 2023 or the first quarter of 2024.

After the merger, the company will operate under the name Novozymes A/S, the former Chr. Hansen company will be dissolved, and CHR. Hansen will be registered as a second name. The new company will remain registered in Denmark and will continue to trade on the NASDAQ Copenhagen Stock Exchange.

According to public information, Novozymes is the world's leading company in industrial enzyme and microbial preparations, with a global market share of more than 40%. Founded in 1874, CHR. Hansen is committed to providing natural biological solutions for food nutrition, pharmaceuticals and agriculture, and has made significant achievements in the field of microbiology.

According to the statement, the potential market size of bio-solutions is expected to reach 15 billion euros, and the economic benefits of bio-solutions manufacturing are expected to triple by 2040. Therefore, the strategic significance of the merger is that the combined group will optimize the joint innovation platform of the two companies, while focusing on providing customers with the world's leading biological solutions, and jointly address and meet society's growing demand for more efficient, scalable and sustainable biological solutions.

The management of both Novozymes and CHR Hansen gave a positive review of the deal. Novo Holdings, the largest shareholder of both Novozymes and CHR Hansen, said the two companies were a "perfect match" and would fully support the proposed merger of the two companies. [2]

How will the combination of two companies with a common goal and complementary strategies show the world the true power of biological solutions?

Transaction size: 525 million yuan

Disclosure date: December 2022

This is the biggest deal of the 2022 new tea circuit.

On December 5, 2022, Nai Xue's Tea announced that it had signed an investment agreement with Lele Tea and would acquire 43.64% of the equity interest of the target company for 525 million yuan. After the completion of the transaction, Nai Xue's Tea will become the largest shareholder of Lele Tea, and Lele Tea will become an associated company of Nai Xue's tea, and will continue to maintain independent operations, maintaining "brand unchanged", "team unchanged" and "operation unchanged".

At this point, Lele tea's twists and turns of "selling oneself" finally drew a full stop. It is reported that since the second half of 2020, Lele Tea has been interested in selling, and many parties are looking for a receiver. In July 2021, it was rumored that Genki Forest and Heicha intended to acquire Lele Tea, but the negotiations ultimately failed.