December 19, 2022

By Lynda Kiernan-Stone, Global AgInvesting Media

Novozymes and Chr. Hansen have agreed to a statutory merger that will result in a global biological solutions giant with annual revenue of approximately EUR 3.5 billion (US$3.7 billion).

This deal will unite two strategically complementary biosolutions companies into a venture that will unleash the full potential of the category while generating significant benefits for society at large and invested shareholders. Following the completion of the deal, the combined group will continue to be headquartered in Denmark under the name Novozymes, with Novozymes being the continuing company, and Chr. Hansen, the dissolving.

Meet the Players

Novozymes is the world’s leading provider of enzyme and microbial technologies that enable higher agricultural yields, energy-efficient production, renewable fuels, and low-temperature washing. For 100 years the company has worked to improve biosolutions performance while preserving the Earth’s resources.

Likewise, Chr. Hansen is a global biosciences company in existence for 145 years developing natural ingredient solutions that improve sustainability for the food, nutritional, pharmaceutical, and agriculture industries, and better health and living for the global population. 

The company noted that it is the most sustainable food ingredient provider in the world, with microbial and fermentation technology platforms that include a wide and relevant collection of about 40,000 microbial strains with game-changing potential.

“I’m proud to share that Novozymes and Chr. Hansen are proposing to join forces to create a Danish-based global biosolutions partner based on our strong complementary technology platforms, highly dedicated employees and customer-centric approaches,” said Mauricio Graber, president and CEO, Chr. Hansen.

“Building on shared purpose-driven values and cultures, as well as an unquestionable business rationale, the proposed combination of these two iconic Danish companies represents a natural next step towards addressing the needs of tomorrow.”

All Together Now…

Once combined, the resulting entity will control a broad diversified biological portfolio, half of which will focus on enabling healthier lives and producing better foods, while the second half will address reducing chemical use and targeting climate neutral practices.

The Group will operate a global network of 38 R&D and application centers, 23 manufacturing sites, and will employ approximately 10,000 people.

Expected revenue synergies are estimated at EUR200 million (US$212 million), with EUR80-90 million (US$85-$95 million) EBIT impact within the first four years, and EUR80-90 million (US$85-$95 million) in cost synergies within the first three years.

After completion of the merger, Novozymes shareholders will own 44 percent of the venture, Chr. Hansen shareholders will own 34 percent, and Novo Holdings, the largest shareholder in both companies, will own 22 percent of the combined group. 

“As long-term shareholders in both Novozymes and Chr. Hansen, we are in full support of the plans to combine the two companies,” said Kasim Kutay, CEO, Novo Holdings. “

Due to our strong belief in the commercial, strategic, and long-term financial merits of this transaction, we are willing to accept a less favorable exchange ratio for our shares in Chr. Hansen than what is offered to other shareholders.”

Novozymes estimates that the current global biological solutions market to be valued at approximately EUR15 billion (US$16 billion) and growing. Likewise, the World Economic Forum concludes that the economic impact from biological solutions will grow three-fold by 2040, due to constantly increasing needs from a growing global population that has intensified pressure on the world’s natural resources.

Together, Novozymes and Chr. Hansen will be better positioned to meet customers’ needs at this pivotal moment for society, with scalable and efficient biological solutions thanks to its diverse and dedicated talent pool, a purpose-driven culture, strong patent positions, enhanced operations, innovation and commercial expertise, and expanded customer base.

“The combination of two strategically complementary companies with a shared purpose and advanced capabilities will show the world the true power of biosolutions,” said Ester Baiget, president and CEO, Novozymes.

“Today’s announcement is fully aligned with Novozymes’ strategy and is another step towards unlocking additional growth opportunities. Novozymes and Chr. Hansen share the strong conviction that our combined scale, know-how, commercial strengths, and innovation excellence will drive value for our shareholders, customers, and society at large by providing the sustainable solutions the world so urgently needs.”

Jørgen Buhl Rasmussen, chairman at Novozymes, added, “We are excited by the immense, additional potential we see in joining Novozymes and Chr. Hansen to create a true global biosolutions leader underpinned by our shared Danish heritage.”

“We are grateful to have such a supportive shareholder in Novo Holdings, one that shares our belief that the two companies will be even better together and enable significant shareholder value accretion.”

~ Lynda Kiernan-Stone is editor in chief with GAI Media, and is managing editor and daily contributor for Global AgInvesting’s AgInvesting Weekly News and  Agtech Intel News, as well as HighQuest Group’s Unconventional Ag. She can be reached at lkiernan-stone@globalaginvesting.com.

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