The Netherlands’ DSM is set to take control of powerful Swiss fragrance house Firmenich in a merger that would create a challenger to sector leader Givaudan.

Firmenich manufactures top fragrances including CK One, Gucci Bloom, YSL Black Opium, and Flower by Kenzo, working with star noses like Armani Acqua di Gio creator Alberto Morillas or Annick Menardo (the nose behind Dior’s cult Bois D’Argent perfume). Mass-market scents include Axe Body Spray and Persil detergent.

The move will allow DSM to complete a transition away from engineering into producing more consumer-facing products like vitamins, while Firmenich’s owners will receive shares as well €3.5 billion ($3.75 billion) in exchange for a controlling stake in the combined group, which will boast revenues of over $12 billion.

Givaudan, long the sector leader in fragrances and flavors with scents including Lancôme Idole, Boss Hugo Boss, and Tom Ford Black Orchid reported around $7 billion in annual sales last year.

A handful of firms dominate the fragrance and flavour ndustry, supplying big licensees like L’Oréal, Coty and Puig, niche players like Diptyque and Le Labo or food giants like Nestlé. Perfume recipes are tightly guarded by these players as exclusive trade secrets: most fragrance brands do not own or even have access to the formulas of their hit products, giving suppliers an unusual amount of leverage in the space.

Fragrance sales surged 49 percent last year, bouncing back sharply from the pandemic, according to consultancy NPD.

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