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Fragrance merger takes form

27-Feb-2003

Symrise - the new fragrance and flavour synergy. Just four months after the European Commission gave equity group EQT the all clear to buy two leading German-based fragrance and flavour producers - Haarmann & Reimer and Dragoco - the brand new company is taking its first steps under the new name of Symrise.

In autumn 2002 EQT acquired the world's fifth largest flavours and fragrances maker, Haarmann & Reimer, from then-owner, Bayer. At the same time, EQT acquired shares in its competitor Dragoco, leading to a merger between the two rivals. The merger has created a company thought to be capable of sales of €1,245 million, allowing it to join the ranks of the top industry players.

Dragoco CEO Horst-Otto Gerberding, holding a 22 per cent stake in the new company, is heading up Symrise while Haarmann & Reimer's president and CEO, Lambert Courth, is set to return to Bayer.

"Our combined core competencies and our joint expertise serve as the guarantee that Symrise will successfully position itself in the global market," said Gerberding this week.

Swedish financial investor EQT Northern Europe Private Equity Funds (EQT) has a controlling 76 per cent in the new company with the NordLB bank topping up the remaining 2 per cent stake.

Both Haarmann & Reimer and Dragoco have established strong global positions in fragrance and flavour manufacturing, and also aroma chemicals and cosmetic ingredients. Last year Haarmann & Reimer reported sales of €872 million, while Dragoco's 2001 sales generated €372 million.

Sales growth was generated, in particular, in the flavour segment, where combined sales rose by 6.2 per cent, as well as by the regions of Europe (+ 6.1 per cent) and South America (+ 7.5 per cent). The fragrances and aroma chemicals/cosmetics segments also posted higher sales growth year on year.

The new company is set to have a market share of around 11 per cent of the €11 billion global market. At the time of the purchase, ambitious Swiss flavour and fragrance rival Givaudan commented that it would not change its goal to become industry leader and was still on the lookout for acquisitions.

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