IFF to Sell Majority Stake in Food Ingredients Business to CVC in $4.3 Billion Deal
International Flavors & Fragrances (IFF) said Friday that it agreed to sell a majority stake in its food ingredients unit to private equity firm CVC Capital Partners in a deal worth roughly $4.3 billion, as part of IFF's efforts to focus on higher-margin businesses.The company expects to receive net proceeds of about $3.8 billion, which it intends to use to reduce debt, repurchase shares and reinvest in its core portfolio. IFF will retain a 10% equity holding in the food ingredients division."This transaction represents an important strategic milestone in our ongoing portfolio optimization initiative, allowing us to further concentrate resources on our higher-growth, higher-margin segments," IFF Chief Executive Erik Fyrwald said in a statement. "This transaction creates substantial value for shareholders while positioning IFF to drive sustained, profitable long-term growth."Shares of the company were up 2.9% in Friday trade, taking the stock's year-to-date gain to 19%.The food ingredients unit, which serves multinational food and beverage customers, generated nearly $3.1 billion in sales last year."By retaining a minority stake in food ingredients, we will continue to participate in the future upside of a strong business under dedicated ownership," Fyrwald said.The deal, which requires approval by regulators, is expected to complete by the end of the second quarter of 2027. The company estimates that the transaction will be dilutive to its adjusted earnings on a per-share basis in the first year after completion."We are delighted to welcome IFF's food ingredients business to CVC's US portfolio," CVC Managing Partner Lorne Somerville said. "Its global reach and proprietary technical capabilities provide a clear competitive advantage, and we see significant opportunity for continued growth."Including this transaction, IFF has divested 13 non-core businesses for about $10 billion as part of its strategy to streamline its portfolio. In 2025, the company sold its pharma solutions segment to French ingredients company Roquette.IFF said it continues to expect 2026 sales between $10.5 billion and $10.8 billion, while the current consensus on FactSet is for $10.75 billion.
