Novozymes and Chr. Hansen to combine and create a leading global biosolutions partner
Today, Novozymes and Chr. Hansen have entered into an agreement to create a leading global biosolutions partner through a statutory merger of the two companies. The combination is expected to unleash the full potential of biological solutions and generate significant value for all stakeholders and society at large.
COPENHAGEN, Denmark – December 12, 2022. The proposed combination of Novozymes A/S ("Novozymes") and Chr. Hansen Holding A/S ("Chr. Hansen") will create a strong biosolutions group with a broad biological toolbox and a diversified portfolio across markets. Uniting two strategically complementary biosolutions companies will accelerate their already best-in-class performance.
Novozymes and Chr. Hansen together will meet customers’ growing demands for efficient, scalable, and sustainable biosolutions. The combined group will have a global talent pool of diverse and passionate employees who will benefit from its strong purpose-driven culture, expanded global presence and shared ambition to provide answers to the biggest challenges facing society. Together, the combined group will be equipped to stand stronger in addressing global challenges including enabling healthier lives, transforming food systems, and accelerating towards a climate neutral society.
Novo Holdings A/S ("Novo Holdings"), the largest shareholder in both Novozymes and Chr. Hansen, has affirmed its confidence in the two companies being a perfect match, and that a transaction would create a global leader in biosolutions that would capitalize on attractive growth opportunities while serving societal needs.
Ester Baiget, President and CEO of Novozymes, said:
“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. Novozymes and Chr. Hansen share the strong conviction that our combined scale, know-how, commercial strengths, and innovation excellence will drive value for our shareholders, customers, and society at large by providing the sustainable solutions the world so urgently needs.”
Jørgen Buhl Rasmussen, Chairman of Novozymes, added:
“We are excited by the immense, additional potential we see in joining Novozymes and Chr. Hansen to create a true global biosolutions leader underpinned by our shared Danish heritage. We are grateful to have such a supportive shareholder in Novo Holdings, one that shares our belief that the two companies will be even better together and enable significant shareholder value accretion.”
Mauricio Graber, President and CEO of Chr. Hansen, said:
“I’m proud to share that Novozymes and Chr. Hansen are proposing to join forces to create a Danish-based global biosolutions partner based on our strong complementary technology platforms, highly dedicated employees and customer-centric approaches. Building on shared purpose-driven values and cultures, as well as an unquestionable business rationale, the proposed combination of these two iconic Danish companies represents a natural next step towards addressing the needs of tomorrow.”
Dominique Reiniche, Chair of the Chr. Hansen Board of Directors, added:
“With this proposed combination, we are jointly creating a leading biosolutions partner dedicated to securing a healthy planet and a more sustainable future. The combined business offers a great opportunity to pursue attractive synergies by creating new solutions for the benefit of our customers and consumers, and will create value for all our shareholders as well as for society.”
Lars Rebien Sørensen, Chairman of Novo Holdings and Novo Nordisk Foundation, said:
“The two companies are a perfect match. Chr. Hansen with its expertise in microbials and Novozymes with its background in enzymes. Combining the two companies will create a global leader in biosolutions.”
Kasim Kutay, CEO of Novo Holdings, added:
“As long-term shareholders in both Novozymes and Chr. Hansen, we are in full support of the plans to combine the two companies. Due to our strong belief in the commercial, strategic, and long-term financial merits of this transaction, we are willing to accept a less favorable exchange ratio for our shares in Chr. Hansen than what is offered to other shareholders.”
Novozymes estimates the current addressable market for biological solutions to be around EUR 15 billion and growing.1 According to the World Economic Forum, the economic impact from biological solutions is expected to grow 3-times by 2040, driven by growing needs and demands from growing populations around the world.2 This has increased pressure on natural resources, resulting in a need to produce more with less and an urgency to enable healthier lives, transform food systems and accelerate towards a climate neutral society.
These challenges have also affected customers, who are simultaneously seeking to enhance profitability, win consumers, comply with increasingly demanding regulations and be good corporate citizens. The combination of Novozymes and Chr. Hansen will capitalize on this pivotal moment for society by providing the biological solutions and biotech necessary to address these global megatrends and meet customer demands to produce more, sustainably, and efficiently.
Customer-centric global reach aligned with strong innovation capabilities
The customer-centric global reach of a combined group, aligned with the advanced discovery and applied research capabilities from a network of 38 research & development (R&D) and application centers and 23 manufacturing sites, will provide customers with a partner with both global scale and local presence.3 The broad biological toolbox, strong patent positions, enhanced operations, innovation and commercial excellence and expanded customer base would also allow the combined group to enjoy strong long-term organic revenue growth.
Uniting and optimizing the combined innovation platforms of both Novozymes and Chr. Hansen will bring together approximately 2,000 employees globally focused on R&D with over EUR 350 million reinvested into R&D annually, representing an estimated 10-11% of combined sales.4 Integrated capabilities, cutting-edge technology and agnostic biological problem solving, will put the combined group at the forefront of finding real solutions to real problems, faster and with higher accuracy.
Attracting, retaining, and developing world-class talent
Together, Novozymes and Chr. Hansen will comprise a global talent pool of 10,000 diverse and passionate employees around the world, with the expertise to innovate and create value for its customers.5 A combined group will also have a strong purpose-driven culture, based on complementary values and inspired by the power of biosolutions. Novozymes and Chr. Hansen believe that the combined group’s shared ambition and reputation for excellence, as well as its expanded global presence, would reinforce its ability to attract and retain the best talent in the sector. The power of these two talented teams would, together, allow the combined group to effectively service the fast-growing market for biological solutions.
Dedication to a healthy planet and sustainable future
Sustainability is fundamental to both Novozymes and Chr. Hansen and the combined group would be driven by clear ESG commitments that represent a dedication to a healthy planet and sustainable future. The combined group is expected to commit to carbon neutrality by 2050, 75% reduction in absolute CO2 emissions from its operations (Scopes 1+2) and 35% reduction in absolute CO2 emissions from its supply chain (Scope 3) by 2030. The combined group will also maintain Novozymes and Chr. Hansen’s shared commitments to diversity and seek to achieve, at a minimum, 45% women and 45% men across all professionals and senior management by 2030.6
The combined group
Novozymes is the world leader in biological solutions and the world's largest provider of enzyme and microbial technologies. For around 100 years, Novozymes has worked alongside customers, partners, and the global community to improve industrial biosolutions performance, whilst preserving the planet’s resources and helping to build better lives. Chr. Hansen is a global, differentiated bioscience company with over 145 years’ experience developing natural ingredient solutions for the food, nutritional, pharmaceutical, and agricultural industries to enable sustainable agriculture, better food, and healthier living for more people around the world.
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 combined group will operate a global network of 38 R&D and application centers and 23 manufacturing sites and employ around 10,000 talented and purpose-driven employees who are inspired by the power of biosolutions.
Upon completion of the statutory merger, Ester Baiget, the current Chief Executive Officer (CEO) of Novozymes, would assume leadership of the combined group as CEO. The Chief Financial Officer (CFO) would be Lars Green, the current CFO of Novozymes. Both roles would be part of the future Executive Leadership Team.
It is proposed that the Chair of the Board of Directors, shall be nominated by Novozymes, and the Vice Chair shall be nominated by Chr. Hansen. In addition, it is proposed that Novozymes will be responsible for nominating two (2) other board members of the combined group’s Board of Directors, Chr. Hansen will also nominate two (2) other board members, and Novo Holdings will, as the largest shareholder, also nominate two (2) other board members.
Shortly after completion of the statutory merger, Novozymes' Board of Directors will convene a general meeting for the purpose of electing any nominated members to the Novozymes Board of Directors, if such persons are not already an incumbent member of the Novozymes Board of Directors.
Until the employees of Novozymes have conducted the next election of employee representatives to Novozymes’ Board of Directors (planned to occur by the end of the calendar year 2024 with the new employee representatives joining Novozymes' Board of Directors following the Novozymes annual shareholders’ meeting in 2025), the current four (4) employee representatives shall continue as board members, unless they are replaced by the currently elected alternates. Until new employee representatives join the Novozymes Board of Directors after the next election, the current Chr. Hansen employees shall have the right to appoint two (2) board observers to the Board of Directors of Novozymes.
The contemplated combination will be effectuated through a statutory merger in accordance with the Danish Companies Act, with Novozymes as the continuing company and Chr. Hansen as the dissolving company (the "Merger"). Following completion of the Merger, the combined company will continue to be admitted to trading and official listing on Nasdaq Copenhagen, and will continue to be domiciled and headquartered in Denmark, with the exact location to be determined between Hoersholm or Lyngby. The combined company will also continue to follow those rules and regulations for corporate governance being applicable for a company listed on Nasdaq Copenhagen.
At completion of the Merger, the combined company will initially operate under the name Novozymes A/S with Chr. Hansen registered as a secondary name. Novozymes and Chr. Hansen will jointly develop a name and brand of the combined company.
Key facts and figures
About Chr. Hansen
Chr. Hansen is a global, differentiated bioscience company that develops natural ingredient solutions for the food, nutritional, pharmaceutical, and agricultural industries. At Chr. Hansen, we are well positioned to drive positive change through microbial solutions. We have worked for over 145 years to enable sustainable agriculture, better food and healthier living for more people around the world. Our microbial and fermentation technology platforms, including our broad and relevant collection of around 40,000 microbial strains, have game-changing potential. Matching customer needs and global trends, we continue to unlock the power of good bacteria to respond to global challenges such as food waste, global health and the overuse of antibiotics and pesticides. As the world’s most sustainable food ingredients company, we touch the lives of more than 1 billion people every day. Driven by our legacy of innovation and curiosity to pioneer science, our purpose – To grow a better world. Naturally. – is at the heart of everything we do.
Novozymes is the world leader in biological solutions. Together with customers, partners, and the global community, we improve industrial performance while preserving the planet's resources and helping build better lives. As the world's largest provider of enzyme and microbial technologies, our bioinnovation enables higher agricultural yields, low-temperature washing, energy-efficient production, renewable fuel, and many other benefits that we rely on today and in the future. We call it Rethink Tomorrow. www.power-with-biology.com
Tobias Cornelius Björklund
1 Novozymes internal estimates (CMD 2021 market analysis adjusted).
2 WEF 2018; WEF 2022; Novozymes internal estimates.
3 Figures include Novozymes’ acquisition of Synergia. Novozymes Annual Report 2021; Chr. Hansen Annual Report 2021/22; Chr. Hansen investor presentation 2022.
4 Novozymes internal estimates; Novozymes Annual Report 2021; Chr. Hansen Annual Report 2021/22.
5 Novozymes Annual Report 2021; Chr. Hansen Annual Report 2021/22.
6 Non-financial ambitions based on Novozymes’ targets. Base year for CO2 emissions: Novozymes 2018; Chr. Hansen 2019/2020.
7 Combined financials are based on Chr. Hansen’s audited Annual Report 2021/22 and Novozymes’ unaudited interim reports for 9M 2022 and Q4 2021. Novozymes figures converted from DKK to EUR using a single FX rate of 7.4394 (average rate October 2021 – September 2022) for purposes of translation only.
8 Reflecting a base year of 2023. Expectation reflects each individual company’s previously communicated targets adding synergies from the combination. Note all targets assume constant currencies, no additional acquisitions, no divestments, no special items, a gradual normalization of the global economy.
9 Estimated integration costs of EUR 250 million, of which approximately EUR 50 million would be capitalized, are expected through 2026. PPA is defined as Purchase Price Allocation. Expectation reflects each individual company’s previously communicated targets adding synergies from the combination. Note all targets assume constant currencies, no additional acquisitions, no divestments, no special items, a gradual normalization of the global economy.
10 EPS refers to Earnings Per Share measured in EUR.
11 The free float refers to Chr. Hansen shares that are not as of the date hereof owned by Novo Holdings. As of the date hereof, Novo Holdings owns approximately 22% of the total share capital of Chr. Hansen. If Novo Holdings after the date hereof should acquire further shares in Chr. Hansen, it will for the purpose of the Merger be considered a "Chr. Hansen free float shareholder" in respect of such shares. Restricted Chr. Hansen shareholders in certain jurisdictions will receive a cash payment in lieu of their Merger Consideration as set out in more detail below.
12 Based on closing share prices of Novozymes B-shares of DKK 431.00 and Chr. Hansen shares of DKK 444.20, as of December 9, 2022.
13 Blended premium based on weighted average of 78% ownership for Chr. Hansen free float and 22% ownership for Novo Holdings and premiums of 49% and (1%) respectively based on the announced exchange ratios and Novozymes and Chr. Hansen’s closing prices as of December 9, 2022.
14 The free float refers to Novozymes shares that are not owned by Novo Holdings.
15 Excludes impact of any potential future share purchases made by Novo Holdings. Inclusive of Novozymes treasury shares.