IFF delisting from Tel Aviv Stock Exchange

IFF CEO and chairman Andreas Fibig with Ori Yehudai

The US-based food ingredients and flavors company has produced a 24% negative return since listing in Tel Aviv after buying Frutarom.

Two years after becoming listed on the Tel Aviv Stock Exchange, and after yielding a negative return to investors of about 24% so far, the stock of International Flavors & Fragrances (IFF) is about to be delisted. The company, which produces ingredients and flavour essences for the food industry, has announced its intention of removing its stock from trading in Tel Aviv, and, in accordance with Israeli law, the delisting will take place in three months' time, on January 20, 2021. IFF's stock will continue to be traded thereafter on the New York Stock Exchange and EuroNext Paris. The Tel Aviv Stock Exchange has announced that IFF will be removed from its stock indices on December 3.

US-based IFF listed on the local stock exchange after acquiring Israeli company Frutarom in a $7.1 billion deal in 2018. Interviewed on the day that the acquisition was announced, Frutarom CEO Ori Yehudai said, "IFF will list its shares for trading on the Israeli stock exchange and there will be a very good connection between the companies. This is an excellent story for the Israeli economy and also for the Israeli stock market. A global industrial company will be traded here that has a market cap of a little under $20 billion, like Teva, or perhaps second only to Teva." In the two and half years that have passed since then, however, the values of both companies have shrunk: IFF's market cap is currently $12.1 billion, while that of Teva is $10.2 billion.

The Frutarom deal proved more complicated than it appeared at that time. In 2019, about a year after the acquisition, IFF reported that in the process of the merger between the two companies it had found indications that Frutarom units in Russia and Ukraine had made improper payments to representatives of the company's customers. Later on, IFF admitted that such payments had indeed been made and that key people in Frutarom's senior management were aware of them.

Six months ago, the news was released that the Israel Police National Fraud Unit had questioned former senior Frutarom managers - Yehudai, company vice presidents VP Alon Granot and Guy Gill, and Ari Rosenthal, who was responsible for the company's business in Russia and Ukraine - on suspicion of bribing a foreign official, reporting offences under the Securities Law, false accounting, fraud, and breach of trust in a corporation.

At the same time, IFF announced a far bigger deal, in which it would be merged with the with the Nutrition and Biosciences business of US chemicals giant DuPont in a $26 billion share transaction. That deal has yet to be completed.

Published by Globes, Israel business news - en.globes.co.il - on October 21, 2020

© Copyright of Globes Publisher Itonut (1983) Ltd. 2020

IFF CEO and chairman Andreas Fibig with Ori Yehudai
IFF CEO and chairman Andreas Fibig with Ori Yehudai
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