International Flavors and Fragrances to divest food ingredients division in $4.3 billion deal

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* IFF will use the proceeds of the sale to repay its debt, repurchase shares and reinvest in its core activities

*IFF will retain a 10% minority stake in the divested food ingredients unit

* IFF has sold 13 non-strategic activities in recent years

(Added analyst commentary and updated stock prices) by Juveria Tabassum

International Flavors & Fragrances IFF.N has agreed to sell its food ingredients business to CVC Capital Partners in a deal valuing the division at around $4.3 billion, as the flavor maker shrinks its portfolio to improve profitability.

The flavor maker said it will now focus more on the fragrance and health businesses as consumer spending in this area remains strong.

The company said it had divested 13 non-core businesses in recent years and raised about $10 billion in gross revenue to reinvest in its higher-margin businesses.

IFF expects to receive approximately $3.8 billion upon closing from the sale of its food ingredients division and said proceeds from the sale would be used for debt reduction, share repurchases and new investments.

The company also said it would retain a 10% stake in the business, which makes emulsifiers, sweeteners and pastes. It was IFF’s largest division by revenue as of December 31, 2025, according to its annual report.

“We believe this sale represents the last major step in IFF’s transformation process,†said Kristen Owen, an analyst at Oppenheimer.

On Friday, IFF stock rose about 2%. The company has a market capitalization of approximately $19.9 billion, according to LSEG data.

Last year, the company sold its pharmaceutical solutions business to French plant-based ingredient maker Roquette, in a deal valued at $2.85 billion. It also sold its soy protein concentrate business to food company Bunge BG.N earlier this year.

Food companies, which are IFF’s main customers, are also streamlining their operations, as consumers shift to cheaper products or opt for healthier alternatives. The increasing adoption of appetite suppressant weight loss drugs is also changing eating habits.

The maker of Frank’s RedHot sauce, McCormick MKC.N, agreed in April to merge with the ULVR.L food division of Unilever, owner of Hellmann’s mayonnaise. A few days later, Unilever announced its intention to buy the American food supplement brand Grüns.

The transaction with IFF is expected to be finalized at the end of the second quarter of 2027.