Roquette Frères, a French player in plant-based ingredients, is seeking approval from India’s Competition Commission (CCI) to acquire the pharma solutions business and specific product lines from International Flavors & Fragrances Inc. (IFF).
The acquisition involves purchasing equity interests in IFF’s entities, including its pharma solutions segment and parts of its Nourish business.
Roquette, which operates in India through subsidiaries like Crest Cellulose and Roquette India, intends to align its customer base, business operations, and manufacturing capabilities with IFF’s assets.
Strategic Goals and Market Presence
The deal, announced in March 2024, is part of Roquette’s strategy to enhance its position in the pharmaceutical sector.
It focuses on expanding the company’s portfolio in pharmaceutical excipients and ingredients.
Roquette emphasised that its acquisition of IFF’s pharma solutions business is strategically designed to strengthen its global presence. This includes expanding in India, where IFF operates through Danisco Nutrition and Biosciences India.
The acquisition will also further bolster Roquette’s capabilities in plant-based ingredients on a worldwide scale.
Minimal Overlap in the Indian Market
In its submission to the CCI, Roquette outlines that the acquisition has limited overlap in the Indian market.
This is primarily related to the supply of essential ingredients. These include microcrystalline cellulose (MCC) and croscarmellose sodium (CCS), which are crucial for pharmaceutical applications.
Additionally, there is a potential vertical linkage between IFF’s upstream activities in hydroxypropyl methylcellulose (HPMC). Roquette’s downstream operations in HPMC-based capsules could benefit from this connection.
Despite the linkages, Roquette mentions that the transaction will not raise competition concerns. It highlights the minimal market overlap between the companies in India and asserts that the competition constraints in the market are strong.
Furthermore, Roquette believes it is unnecessary to define specific product markets. It also thinks there is no need to define geographic markets for assessing the competition impact of the acquisition.
Financial Details and Global Impact
The acquisition agreement, valued at up to $2.85 billion, is set to transfer IFF’s pharma solutions unit to Roquette.
The business, which operates ten research and development and production sites globally, generated approximately $1 billion in revenue in 2023.
By acquiring the unit, Roquette aims to further solidify its position in the pharmaceutical excipient sector and expand its global footprint.
Strengthening Global Pharmaceutical Strategy
Regulatory approval from the CCI is crucial for finalizing this strategic acquisition.
By integrating IFF’s pharma solutions business, Roquette plans to enhance its offerings and capabilities in the pharmaceutical sector.
As reported by goodreturns.in, the acquisition reflects Roquette’s broader commitment to expanding its role in plant-based ingredients and solidifying its leadership in the global pharmaceutical market.
