Robertet committed to independence as Givaudan, Firmenich build stakes
Swiss supplier Givaudan confirmed it has acquired 108,109 Robertet shares, or 4.68% of the company’s outstanding share capital, giving it 3.19% of voting rights. French securities law requires stake building to be declared when the shareholding passes various thresholds, the first of which is 5% of outstanding share capital.
Analysts at Seaport Global estimate that Givaudan has invested around CHF100m in Robertet.
The news follows Swiss peer Firmenich’s move to take a 17% stake in Robertet last September. Firmenich has steadily been growing its stock since and, Robertet confirmed, the group now holds 21.61% of share capital, which equates to 11.27% of voting rights.
The founding Maubert family still have a controlling majority when it comes to voting rights – at 67.5% – but only account for 47.02% of share capital. Robertet is managed and controlled by the fourth and fifth generation of the family, including CEO Philippe Maubert, head of perfumery Christophe Mauber and head of flavourings Olivier Maubert.
“Robertet did not solicit the acquisition of this holding and it was not the subject of any negotiations,” the French group said in a statement on Givaudan's purchase. “As has always been affirmed, the group’s independence remains the priority as it creates value and future growth.”
Blocking a hostile takeover?
The maneuverings come in the context of a consolidating flavours and fragrances sector.
Last year, 65 deals were recorded in the ingredients space making it the most active category for food and beverage M&A, according to Zenith Global.
“This is an interesting move by Givaudan, following Firmenich's unsolicited purchase of a 17.4% stake in Robertet in September last year,” Seaport’s Brett Hundley noted.
“Larger-scale M&A has been readily apparent across the F&F space in recent years, and this activity continues within 2020, as ingredient companies look to broaden their portfolios while also moving towards a natural product offering.”
Robertet's integrated supply chain and focus on naturals certainly fits the bill.
The natural flavour and fragrances group has end-to-end control over its supply chain and describes itself as a 'world leader' in natural ingredients, sourcing around 400 natural raw materials from 60 countries. CEO Philippe Maubert attributed the group’s success to this ‘unique’ business model.
“Ongoing development is the result of a unique positioning of integration, including the whole natural products chain, from their culture, their extraction, their transformation to their use in fragrances and flavours creations.
“Our presence at the source, a guarantee of quality, meets the demand for transparency of our clients and customers. This traceability and our CSR commitment are efficient thanks to a sourcing policy that respects humans and the environment.”
Robertet generated sales of €525m in 2018, up 4.2%, and profit of €51.9m, up 7.2%. Significantly, the company said it is debt-free, meaning it has the financial capacity to 'grow without the support of a competitor'.
Given Robertet’s insistence that it intends to remain independent, and confirmation that Givaudan’s purchase was on the open market and ‘not the subject of any negotiations’, the move left some industry watchers pondering whether Givaudan was preemptively blocking a potential future hostile takeover from rival Firmenich.
Unsolicited or hostile bids are permitted but are not common in France. Between 2014 and 2018 just five unsolicited bids were launched.
Speaking last year after it emerged that Firmenich acquired its initial stake in the company, chief executive Philippe Maubert insisted: “The independence of our company is non-negotiable." The company declined to offer Firmenich a voice on its board or to 'build a collaboration that would limit [Robertet's] operational and strategic flexibility'.
