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Novozymes and Chr. Hansen to merge

Danish enzyme suppliers Novozymes and Chr. Hansen are to merge in a strategic alliance that will "show the world the true power of biosolutions", according to the CEO of the continuing company, Novozymes.

Announced yesterday (Monday 12 December), the combination will be completed as a statutory merger in accordance with the Danish Companies Act, with Novozymes as the continuing company and Chr. Hansen as the dissolving company. Current Novozymes CEO Ester Baiget will take over as CEO while Lars Green, current CFO of Novozymes, will take the helm of financial operations as the new CFO.

The new entity will initially operate under the name Novozymes A/S but the companies will jointly develop a name and brand, they said. It will continue to be listed on Nasdaq Copenhagen, and will continue to be domiciled and headquartered in Denmark.

According to a joint statement issued by the companies, organic revenue growth is expected to be 6-8% compound annual growth rate (CAGR) until 2025.

The new entity will enjoy a global network of 38 R&D and application centres, 23 manufacturing sites, and around 10,000 employees. Of these employees, around 2,000 are focused on R&D, with over €350 million reinvested into R&D annually – equivalent to around 10 to 11% of combined sales.

"Integrated capabilities, cutting-edge technology and agnostic biological problem solving, will put the combined group at the forefront of finding real solutions to real problems, faster and with higher accuracy, said the companies.

Chr. Hansen CEO: 'An unquestionable business rationale'

President and CEO of Novozymes Ester Baiget said the combination of the two strategically complementary companies with a shared purpose and advanced capabilities would "show the world the true power of biosolutions".

Mauricio Graber, president and CEO of Chr. Hansen, said: "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."

Under the proposed terms of the merger, which is subject to regulatory approval, Novozymes will nominate the chair of the board of directors with Chr. Hansen nominating the vice chair.

The merger has the backing of Novo Holdings, the largest shareholder in both Novozymes and Chr. Hansen, which said the companies were "a perfect match".

Kasim Kutay, CEO of Novo Holdings, said: "Due to our strong belief in the commercial, strategic, and long-term financial merits of this transaction, we are willing to accept a less favourable exchange ratio for our shares in Chr. Hansen than what is offered to other shareholders."