A deal for DuPont's food business will create a $45 billion giant

The deal announced Sunday values the DuPont unit at $26.2 billion. DuPont shareholders will retain a majority stake in the new entity, which will have a combined annual revenue of more than $11 billion.

New York-based IFF (IFF) develops flavors and fragrances for consumer brands. The company has 33,000 customers and hundreds of manufacturing and research facilities around the world, according to its website.

DuPont, which counts Kevlar and Styrofoam as clients, has been shaking up its business in recent years. The former giant DowDuPont is now three separate companies that focus on material sciences (now called Dow Inc. (DOW)), agriculture (now dubbed Corteva (CTVA)) and specialty goods (DuPont). Aside from its nutrition unit, DuPont also focuses on products related to electronics, transportation and construction.

IFF and DuPont want to blitz the global ingredients market while cutting down on costs significantly. The firms said in a joint statement Sunday that they are projecting savings of about $300 million within three years of closing the deal, and expect the new company to achieve a leading position in segments including soy proteins, enzymes and probiotics.

The firms want to close the deal, which is still subject to approval by regulators and IFF shareholders, by early 2021. IFF CEO Andreas Fibig will continue to serve as chairman and chief executive.

IFF employees working with perfume components at a company lab in France in 2016.

Consumers have been increasingly gravitating toward healthier and more natural flavors, a trend that the companies said played an important factor in their decision to merge. Natural flavors are "the dominating segment" in the global food flavoring industry, accounting for over 50% of the market in 2018, according to Wall Street research firm Reports and Data.

IFF reportedly beat out Irish food giant Kerry Group for the deal. As of last week, the European company had also been interested in snapping up DuPont's nutrition division, according to a Bloomberg report. Kerry Group did not immediately respond to a request for comment from CNN Business outside regular business hours.

"We conducted a very thorough process leading us to the selection of IFF as the preferred strategic partner," Ed Breen, DuPont's executive chairman, said in the statement Sunday. "I am confident that [the nutrition unit] will be well-positioned for its next phase of growth."

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