Green for good
We could see history in the making quite soon. News that the bioscience firms Novozymes and Chr. Hansen are to merge in the biggest-ever Danish deal hit the headlines yesterday. It could see the dissolution of Chr. Hansen in a deal that is expected to complete in the fourth quarter of 2023.
The new group will have annual revenues of approximately 3.5 billion euros ($3.7 billion), the companies said.
The two companies will face the same question many others have: how can they ensure that their mergers will succeed? The answer may lie in part in what Novozymes CEO Ester Baiget said when she commented that Novozymes and Chr. Hansen share the strong conviction that their combined scale, know-how, commercial strengths, and innovation will drive value for shareholders, customers, and society at large by providing sustainable solutions.
Risky as mergers always are, organisations that have similarities in their routines to manage the post-merger scenario have a better crack at success than firms that don’t.
A merger is also not just a route to growth: it’s a path to increased impact – offering organisations the chance to learn from their partners.
Novo Holdings, the largest shareholder in both Novozymes and Chr. Hansen, said the two companies were a “perfect match.” It has said it will vote in favour of the merger.
The companies said they expect the new group to post organic revenue growth of 6-8% until 2025.
Beyond 2025, the ambition is to continue to deliver accelerated sustainable growth from the underlying business coupled with “new, and de-risked, innovation and growth opportunities”.
Novozymes estimates the current addressable market for biological solutions to be around EUR 15 billion and growing. According to the World Economic Forum, the economic impact from biological solutions is expected to grow three times by 2040, driven by growing needs and demands from growing populations around the world.
The combination of Novozymes and Chr. Hansen will capitalise on these scenarios by providing the biological solutions and biotech necessary to address global megatrends and meet customer demands to produce more, sustainably, and efficiently.
Bio solutions are important enablers for decarbonisation and certain bio solutions can be used to increase the yield of agriculture, reduce land use, provide alternative proteins for food, lower demand for plastic and pesticides, prevent food waste, and improve biodiversity, food supply, and food security. However, the deployment of these bio solutions is being held back by a wide range of barriers. The absence of CO2 pricing and an outdated regulatory system are holding back several mature technologies ready for large scale deployment.
The proposed combination of Novozymes and Chr. Hansen will create a leading global biosolutions partner with a broad biological toolbox and a diversified portfolio. Half of the portfolio will focus on enabling healthier lives and producing better foods. The other half will address reducing chemical use and targeting climate neutral practices.
The group will have to go some way in, as it put it, “attracting, retaining, and developing world-class talent”. Together, Novozymes and Chr. Hansen will comprise a global talent pool of 10,000 diverse employees around the world. Success will come from utilising the power of two talented teams to effectively service the fast-growing market for biological solutions.
- Rodney Jack, editor, Food & Drink Technology.
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