Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

Novozymes shares slide after merger with rival Chr. Hansen unveiled

Published 12/12/2022, 15:28
Updated 12/12/2022, 15:28

By Scott Kanowsky 

Investing.com -- Shares in Novozymes A/S B (OTC:NVZMY) (CSE:NZYMb) slumped towards the bottom of the pan-European Stoxx 600 on Monday after the world's largest industrial enzymes maker announced a merger with Chr. Hansen Holding A/S (CSE:CHRH).

Under the terms of the deal, Novozymes will buy its Danish rival at DKK 660.55 (DKK 1 = $0.14) per Chr. Hansen share, reflecting an implied premium of 49% to the stock's closing price on Friday. The combined group is seen bringing in annual revenue of approximately €3.5 billion (€1 = $1.0568), with annual revenue synergies estimated at €200M.

The merger is still subject to approval at extraordinary general meetings of both Novozymes and Chr. Hansen, as well as a sign-off from regulators. It is expected to close in the fourth quarter of 2023 or the first quarter of 2024, after which Chr. Hansen will be dissolved.

“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 chief executive officer Ester Baiget, who is slated to helm the combined group, in a statement.

The move will help boost Novozymes' presence in the food industry, where Chr. Hansen's operations are centered on making enzymes and microbials for the sector.

Analysts at Credit Suisse (SIX:CSGN) argued that the deal is negative for Novozymes, principally due to the "very high" implied premium paid by the company to go forward with the tie-up.

However, they called it "very positive" for Chr. Hansen, adding that a merger between it and Novozymes "seems sensible in a consolidating sector."

Shares in Chr. Hansen soared by nearly 20% in the wake of the announcement.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.