US food giant Archer Daniels Midland (ADM) has agreed to acquire Swiss-German natural ingredients firm Wild Flavors in a bid to enter the health-conscious food and flavouring sectors.
ADM, among the world's largest grain traders and a major food processor, said it will pay Wild Flavors shareholders Hans-Peter Wild and private equity firm Kohlberg Kravis Roberts (KKR) €2.2bn ($3bn, £1.7bn) and assume about €0.1bn of net debt.
Hans-Peter Wild, son of founder Rudolf Wild, owns 65% of the company while KKR owns the remainder. Wild is also the owner of a separate firm that manufactures the Capri-Sun drink but is not part of the deal.
ADM also said it create a new business unit - Wild Flavors and Specialty Ingredients - and expects to complete the all-cash deal by the end of 2014.
Wild Flavors, with estimated 2014 net revenues of about €1bn, is the world's sixth-biggest flavour provider.
The acquisition comes as consumers have been increasingly opting for foods made of only natural components. ADM is targeting €100m of cost savings by the third year of the acquisition, according to a company statement.
Barclays acted as financial adviser to ADM while Citi and Freshfields advised the sellside. Skadden, Arps, Slate, Meagher & Flom LLP acted as legal adviser to ADM.
ADM chief executive Patricia Woertz said in the statement: "Together, ADM and Wild Flavors will create one of the leading flavor and specialty ingredient companies in the world, with sales approaching $2.5bn and significant room to grow."
ADM beat Japanese seasonings maker Ajinomoto, British food ingredients group Tate & Lyle, Swiss scents and flavours firm Givaudan and private equity group EQT in the race to acquire Wild, Reuters reported earlier.
In April, German scents and flavours firm Symrise bought French natural ingredients firm Diana Group for €1.3bn.