The combined entity will have annual revenues of about €3.5 billion and 10,000 staff around the world, working across a network of 23 manufacturing sites and 38 R&D and application centers.

Novozymes regards itself as the world’s largest supplier of enzymes and microbial technologies, while Chr. Hansen says it is an expert in microbial fermentation, developing natural ingredients for the food, nutritional, pharmaceutical and agricultural industries.

“The combination of two strategically complementary companies with a shared purpose and advanced capabilities will show the world the true power of biosolutions. Today’s announcement is fully aligned with Novozymes’ strategy and is another step towards unlocking additional growth opportunities,” said Novozymes president and CEO Ester Baiget.

The companies’ boards have approved the merger, as has Novo Holdings, the largest shareholder in both Novozymes and Chr. Hansen. Shareholders will be able to vote on the deal at separate meetings that are expected to be held during the first half of next year.

Pending shareholder approval, regulatory clearance and other conditions, the merger is expected to close in the fourth quarter of 2023 or the first quarter of 2024.

Under the terms of the deal, Chr. Hansen will be merged into Novozymes as the continuing company, which will initially operate under the Novozymes name and with Chr. Hansen registered as a secondary name. Major shareholder Novo Holdings “firmly intends” to maintain roughly 25.5% ownership in the new group.

Baiget and Novozymes chief financial officer Lars Green will retain their roles in the new business. The two companies will jointly develop a name and brand for the combined group and will also decide on the location of its headquarters — choosing between Lyngby or Hørsholm, where Novozymes and Chr. Hansen respectively are currently based.

Annual revenue synergies are estimated at €200 million and cost synergies — achievable within three years after completion — at €80-90 million. The companies are expecting to grow organic revenue by an annual average of 6-8% until 2025.

Novozymes estimates the current addressable market for biological solutions to be about €15 billion and growing. According to the World Economic Forum, the economic impact from biological solutions is expected to grow threefold by 2040, driven by rising needs and demands from expanding populations around the world.

This, said the Danish group, has increased pressure on natural resources, with a need to transform food systems and accelerate the shift toward a climate neutral society. Combining Novozymes and Chr. Hansen will provide the biological solutions and biotechnology necessary to address global megatrends and meet customer demands to produce more, sustainably, and efficiently, it added.

Half of the combined company’s portfolio will focus on enabling healthier lives and producing better foods, while the other half will address the reduction of chemical use and target climate neutral practices.

Author: Elaine Burridge, Freelance Journalist