(Reuters) - International Flavors & Fragrances (NYSE:IFF) said on Tuesday it would sell its pharma solutions business to French plant-based ingredients maker Roquette in a deal valued at $2.85 billion, as it looks to focus on higher-margin businesses.
The move comes at a time when IFF is seeing demand slow for its food ingredients and solutions business, especially from end-users such as consumer goods companies, amid higher interest rates and inflationary pressures.
New York-based IFF has been on a spree of divesting some of its "non-core" business units over the past year in an attempt to improve its organizational structure as well as reduce its outstanding debt.
IFF's shares were up about 1% in premarket trading.
Family-owned Roquette, which has annual sales of about 5 billion euros ($5.42 billion), bought Japanese drug capsule maker Qualicaps from Japan's Mitsubishi Chemical last year as it aims to expand its global footprint in the pharmaceutical business.
The two companies said they expected to close the deal in the first half of 2025.
In late 2022, IFF had agreed to sell its savoury solutions business to private equity firm PAI Partners in a $900 million deal. In 2021, the company also sold its microbial control business to German specialty chemicals company LANXESS (ETR:LXSG) in a $1.3 billion deal.
IFF's pharma unit accounted for about 8% of total group sales in 2022. Excluding the pharma solutions arm, the company has three other reporting segments — namely food & beverage, health & biosciences and scent — each of which have several sub-units within them.
($1 = 0.9223 euros)