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Ingredient company Symrise to buy Diana for US$1.8 billion

German scents and flavors group Symrise will buy France's Diana Group for an agreed EUR1.3 billion (US$1.8 billion) including debt to narrow the gap on top rival Givaudan and expand in natural ingredients and petfood, according to the company. The purchase from private equity group Ardian will make Symrise the world's third-biggest scents and flavors company, up from number four, and help it toward a goal of boosting annual sales by around EUR1 billion by 2020.

Symrise Chief Executive Heinz-Juergen Bertram said the firm would likely finance the deal via a 10% capital increase, as well as a mix of debt and equity. Based on Symrise's current share price, a sale of 10% of its stock would generate around EUR400 million (US$552.4 million). The acquisition should start adding to earnings per share from 2015 onward, said Symrise.

"We think that the acquisition, although not cheap, makes strategic sense for the company," said Berenberg Bank analyst Evgenia Molotova, saying Diana had a very strong market position in natural ingredients as well as in the petfood market. The deal values Diana at 14 times its 2013 earnings before interest, tax, depreciation and amortization (EBITDA).

According to reports in March 2014, Diana had attracted bids worth more than EUR1.2 billion (US$1.66 billion) including debt from Symrise and Japan's Ajinomoto.

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