MOSCOW (MRC) -- Activist investor Sachem Head has reportedly bought a stake valued at about USD1 billion in IFF and submitted nominations to the company’s board, according to a Reuters, citing people familiar with the matter, said Chemweek.
The move comes less than two weeks after IFF closed its USD26.2-billion merger with DuPont’s nutrition and biosciences (N&B) business, creating a company that will generate more than USD11 billion/year in sales.
Sachem Head launched a proxy fight against Olin last year, reaching a deal in which it took two board seats. The firm is aiming for IFF to take undisclosed steps to improve financial results and ensure the smooth integration of DuPont N&B, according to Reuters.
IFF’s market capitalization is currently about USD33.5 billion. Shares in the company have traded up on report, at around USD135/share today and yesterday, the highest level seen since June 2020.
During IFF’s earnings call this morning, some analysts questioned the company’s financial performance, noting that EBITDA margins trailed below peers even prior to the COVID-19 pandemic. IFF Chairman and CEO said the integration of Frutarom, which IFF acquired in 2018, could have gone better in some respects. There were some “compliance issues” in the taste business, and “we probably could have integrated the European organizations faster,” Fibig told investors.
IFF in January said it is targeting 4-5% annual currency-neutral sales growth through 2023 in the new entity with DuPont N&B. Company executives defended those targets this morning, saying that revenue growth was about a percentage point below that level prior to the merger, and that synergies should boost growth to meet the target. “We have positioned ourselves to deliver very significant growth over the years to come,” Fibig said.
Yesterday, IFF reported fourth-quarter earnings that exceeded analysts’ expectations on the back of volume gains and cost reductions.
As per DuPont forecasts higher-than-expected annual profits on Thursday as industrial material manufacturers' quarterly results exceeded expectations due to rigorous cost checks and a recovery in the auto industry, one of the largest markets.
We remind that Russia's output of chemical products rose in November 2020 by 9.5% year on year. At the same time, production of basic chemicals increased in the first eleven months of 2020 by 6.6% year on year, according to Rosstat's data. According to the Federal State Statistics Service of the Russian Federation, polymers in primary form accounted for the greatest increase in the January-November 2020 output. November production of polymers in primary form rose to 896,000 tonnes from 852,000 tonnes in October. Overall output of polymers in primary form totalled 9,240,000 tonnes over the stated period, up by 17.1% year on year.
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