Kibbutz Givat Oz and a group of former Makhteshim executives will each gross $44 million on the acquisition by the US company.
Kibbutz Givat Oz and a group of former Makhteshim Agan Industries Ltd. investors are due to sign a deal next week for the sale of Aromor Flavor and Fragrances Ltd. to International Flavors & Fragrances Inc. (NYSE: IFF) of the US for $88 million. The negotiations lasted for a year.
New York-based IFF is one of the world's leading companies in the business, with an annual turnover of $3 billion. Aromor is one of its suppliers. After the acquisition, Aromor will stay in Israel for at least 15 years.
Aromor has 80 employees, 20 of whom are members of Kibbutz Givat Oz, near Megiddo. Founded in the early 1980s, financial difficulties prompted the company to bring in investors. Less than a decade ago, a group of former Makhteshim executives, including Avraham Kleiner and Ilan Levita, acquired 30% of the company. They increased their stake to 50% three years later. The company produces aroma chemicals for the food, cosmetics, and perfume industries
Although Kibbutz Givat Oz will gross $44 million on the deal, there are mixed emotions about it in the kibbutz industries sector, mainly over the growing trend of sales of know-how and infrastructures developed over decades to foreign companies. Previous sales of kibbutz companies include irrigation products manufacturer Netafim Ltd., which Kibbutz Hatzerim sold to Permira for $530 million; the sale by Kibbutz Naan and Kibbutz Dan of their eponymous irrigation products company to India's Jain Ltd. to create NaanDan Jain Irrigation Ltd.; and the sale by Kibbutz Lohamei Haghettaot of meat substitutes company Tivall to Osem Investments Ltd. (TASE: OSEM), which is controlled by Swiss multinational Nestle SA (SWX:NESN)), for NIS 1 billion.
Kibbutz Industry Association chairman Yonatan Bassi told "Globes" today that Aromar's sale was a day of celebration for Kibbutz Givat Oz. "In the modern era, it's wrong to judge plants and companies over the question of who sells and who buys. We're talking about enterprises that manufacture products to make profits, which is why there is a good reason for the kibbutz to celebrate.
"The debate over the export of industries is irrelevant in Aromor's case, but is more relevant to the country and the question about what it should do to create the balance that will keep it here. I am not sure if the Ministry of the Economy knows how to maintain this balance."
Published by Globes [online], Israel business news - www.globes-online.com - on January 15, 2014
© Copyright of Globes Publisher Itonut (1983) Ltd. 2014
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