Novozymes and Chr. Hansen to combine and create a leading global biosolutions partner

On 12 December 2022, Novozymes and Chr. Hansen have entered into an agreement to create a leading global biosolutions partner through a statutory merger of the two companies. The combination is expected to unleash the full poten- tial of biological solutions and generate significant value for all stakehold- ers and society at large. 

The proposed combination of Novozymes A/S ("Novozymes") and Chr. Hansen Holding A/S ("Chr. Hansen") will create a strong biosolutions group with a broad biological toolbox and a diversified portfolio across markets. Uniting two strate- gically complementary biosolutions companies will accelerate their already best- in-class performance.

Novozymes and Chr. Hansen together will meet customers’ growing demands for efficient, scalable, and sustainable biosolutions. The combined group will have a global talent pool of diverse and passionate employees who will benefit from its strong purpose-driven culture, expanded global presence and shared ambition to provide answers to the biggest challenges facing society. Together, the combined group will be equipped to stand stronger in addressing global challenges including enabling healthier lives, transforming food systems, and accelerating towards a climate neutral society.

Novo Holdings A/S ("Novo Holdings"), the largest shareholder in both Novo- zymes and Chr. Hansen, has affirmed its confidence in the two companies being a perfect match, and that a transaction would create a global leader in biosolu- tions that would capitalize on attractive growth opportunities while serving so- cietal needs.

Ester Baiget, president and chief executive officer of Novozymes, said, “The combination of two strategically complementary companies with a shared purpose and advanced capabilities will show the world the true power of biosolutions. Today’s announcement is fully aligned with No- vozymes’ strategy and is another step towards unlocking additional growth opportunities. Novozymes and Chr. Hansen share the strong conviction that our combined scale, know-how, commercial strengths, and innovation excellence will drive value for our shareholders, custom- ers, and society at large by providing the sustainable solutions the world so urgently needs.”

Jørgen Buhl Rasmussen, chairman of Novozymes, added, “We are excited by the immense, additional potential we see in joining Novozymes and Chr. Hansen to create a true global biosolutions leader underpinned by our shared Danish heritage. We are grateful to have such a supportive shareholder in Novo Holdings, one that shares our belief that the two companies will be even better together and enable significant shareholder value accretion.”

Mauricio Graber, president and chief executive officer of Chr. Hansen, said, “I’m proud to share that Novozymes and Chr. Hansen are proposing to join forces to create a Danish-based global biosolutions partner based on our strong complementary technology platforms, highly dedicated employees and customer-centric approaches. Building on shared pur- pose-driven values and cultures, as well as an unquestionable business rationale, the proposed combination of these two iconic Danish compa- nies represents a natural next step towards addressing the needs of to- morrow.”

Dominique Reiniche, chair of the Chr. Hansen Board of Directors, added, “With this proposed combination, we are jointly creating a leading bio- solutions partner dedicated to securing a healthy planet and a more sus- tainable future. The combined business offers a great opportunity to pursue attractive synergies by creating new solutions for the benefit of our customers and consumers, and will create value for all our share- holders as well as for society.”

Lars Rebien Sørensen, chairman of Novo Holdings and Novo Nordisk Foun- dation, said, “The two companies are a perfect match. Chr. Hansen with its expertise in microbials and Novozymes with its background in enzymes. Combin- ing the two companies will create a global leader in biosolutions.”

Kasim Kutay, chief executive officer of Novo Holdings, added, “As long-term shareholders in both Novozymes and Chr. Hansen, we are in full support of the plans to combine the two companies. Due to our strong belief in the commercial, strategic, and long-term financial merits of this transaction, we are willing to accept a less favorable exchange ratio for our shares in Chr. Hansen than what is offered to other share- holders.”

Strategic rationale

Novozymes estimates the current addressable market for biological solutions to be around EUR 15 billion and growing.1 According to the World Economic Forum, the economic impact from biological solutions is expected to grow 3-times by 2040, driven by growing needs and demands from growing populations around the world.2 This has increased pressure on natural resources, resulting in a need to produce more with less and an urgency to enable healthier lives, transform food systems and accelerate towards a climate neutral society.

These challenges have also affected customers, who are simultaneously seeking to enhance profitability, win consumers, comply with increasingly demanding regulations and be good corporate citizens. The combination of Novozymes and Chr. Hansen will capitalize on this pivotal moment for society by providing the biological solutions and biotech necessary to address these global megatrends and meet customer demands to produce more, sustainably, and efficiently.

Customer-centric global reach aligned with strong innovation capabilities

The customer-centric global reach of a combined group, aligned with the ad- vanced discovery and applied research capabilities from a network of 38 re- search & development (R&D) and application centers and 23 manufacturing sites, will provide customers with a partner with both global scale and local pres- ence.3 The broad biological toolbox, strong patent positions, enhanced opera- tions, innovation and commercial excellence and expanded customer base would also allow the combined group to enjoy strong long-term organic revenue growth.

Uniting and optimizing the combined innovation platforms of both Novozymes and Chr. Hansen will bring together approximately 2,000 employees globally fo- cused on R&D with over EUR 350 million reinvested into R&D annually, repre- senting an estimated 10-11% of combined sales.4 Integrated capabilities, cutting- edge technology and agnostic biological problem solving, will put the combined group at the forefront of finding real solutions to real problems, faster and with higher accuracy.

Attracting, retaining, and developing world-class talent

Together, Novozymes and Chr. Hansen will comprise a global talent pool of 10,000 diverse and passionate employees around the world, with the expertise to innovate and create value for its customers.5 A combined group will also have a strong purpose-driven culture, based on complementary values and inspired by the power of biosolutions. Novozymes and Chr. Hansen believe that the com- bined group’s shared ambition and reputation for excellence, as well as its ex- panded global presence, would reinforce its ability to attract and retain the best talent in the sector. The power of these two talented teams would, together, allow the combined group to effectively service the fast-growing market for bio- logical solutions.

Dedication to a healthy planet and sustainable future

Sustainability is fundamental to both Novozymes and Chr. Hansen and the com- bined group would be driven by clear ESG commitments that represent a dedi- cation to a healthy planet and sustainable future. The combined group is ex- pected to commit to carbon neutrality by 2050, 75% reduction in absolute CO2 emissions from its operations (Scopes 1+2) and 35% reduction in absolute CO2 emissions from its supply chain (Scope 3) by 2030. The combined group will also maintain Novozymes and Chr. Hansen’s shared commitments to diversity and seek to achieve, at a minimum, 45% women and 45% men across all profession- als and senior management by 2030.6

The combined group

Novozymes is the world leader in biological solutions and the world's largest provider of enzyme and microbial technologies. For around 100 years, Novo- zymes has worked alongside customers, partners, and the global community to improve industrial biosolutions performance, whilst preserving the planet’s re- sources and helping to build better lives. Chr. Hansen is a global, differentiated bioscience company with over 145 years’ experience developing natural ingre- dient solutions for the food, nutritional, pharmaceutical, and agricultural indus- tries to enable sustainable agriculture, better food, and healthier living for more people around the world.

The proposed combination of Novozymes and Chr. Hansen will create a leading global biosolutions partner with a broad biological toolbox and a diversified portfolio. Half of the portfolio will focus on enabling healthier lives and produc- ing better foods. The other half will address reducing chemical use and targeting climate neutral practices. The combined group will operate a global network of 38 R&D and application centers and 23 manufacturing sites and employ around 10,000 talented and purpose-driven employees who are inspired by the power of biosolutions.

Leadership

Upon completion of the statutory merger, Ester Baiget, the current Chief Executive Officer (CEO) of Novozymes, would assume leadership of the combined group as CEO. The Chief Financial Officer (CFO) would be Lars Green, the current CFO of Novozymes. Both roles would be part of the future Executive Leadership Team.

It is proposed that the Chair of the Board of Directors, shall be nominated by Novozymes, and the Vice Chair shall be nominated by Chr. Hansen. In addition, it is proposed that Novozymes will be responsible for nominating two (2) other board members of the combined group’s Board of Directors, Chr. Hansen will also nominate two (2) other board members, and Novo Holdings will, as the larg- est shareholder, also nominate two (2) other board members.

Shortly after completion of the statutory merger, Novozymes' Board of Directors will convene a general meeting for the purpose of electing any nominated mem- bers to the Novozymes Board of Directors, if such persons are not already an incumbent member of the Novozymes Board of Directors.

Until the employees of Novozymes have conducted the next election of em- ployee representatives to Novozymes’ Board of Directors (planned to occur by the end of the calendar year 2024 with the new employee representatives join- ing Novozymes' Board of Directors following the Novozymes annual sharehold- ers’ meeting in 2025), the current four (4) employee representatives shall con- tinue as board members, unless they are replaced by the currently elected al- ternates. Chr. Hansen will appoint two of its employee representatives to serve as board observers to the Board of Directors of Novozymes until new employee representatives join the Novozymes Board of Directors after the next election.

Corporate governance

The contemplated combination will be effectuated through a statutory merger in accordance with the Danish Companies Act, with Novozymes as the continu- ing company and Chr. Hansen as the dissolving company (the "Merger"). Follow- ing completion of the Merger, the combined company will continue to be admit- ted to trading and official listing on Nasdaq Copenhagen, and will continue to be domiciled and headquartered in Denmark, with the exact location to be deter- mined between Hoersholm or Lyngby. The combined company will also con- tinue to follow those rules and regulations for corporate governance being ap- plicable for a company listed on Nasdaq Copenhagen.

At completion of the Merger, the combined company will initially operate under the name Novozymes A/S with Chr. Hansen registered as a secondary name. Novozymes and Chr. Hansen will jointly develop a name and brand of the combined company.

¹ Novozymes internal estimates (CMD 2021 market analysis adjusted). 

² WEF 2018; WEF 2022; Novozymes internal estimates. 

³ Figures include Novozymes’ acquisition of Synergia. Novozymes Annual Report 2021; Chr. Hansen An- nual Report 2021/22; Chr. Hansen investor presentation 2022.

⁴ Novozymes internal estimates; Novozymes Annual Report 2021; Chr. Hansen Annual Report 2021/22. 

⁵ Novozymes Annual Report 2021; Chr. Hansen Annual Report 2021/22.

⁶ Non-financial ambitions based on Novozymes’ targets. Base year for CO2 emissions: Novozymes 2018; Chr. Hansen 2019/2020.