Private equity firm CVC Capital Partners has agreed to acquire the food ingredients division of International Flavors & Fragrances (IFF) in a transaction valued at around $4.3bn, as sponsor-led carve-outs of non-core corporate assets continue to gather pace, according to a report by the Financial Times.
The business, which manufactures sweeteners, emulsifiers and other specialty ingredients used in industrial food production, will generate net cash proceeds of approximately $3.8bn for IFF upon completion. The company will retain a 10% minority stake in the division following closing, which is expected by the end of June next year.
The transaction forms part of IFF’s ongoing portfolio rationalisation strategy, with the New York-listed group increasingly focusing on its core taste, scent, and health and biosciences businesses. The company has already divested 13 non-core assets in recent years, generating close to $10 billion in gross proceeds.
The sale of the food ingredients unit follows a strategic review initiated last year as IFF continued to reshape the segment, which had been under pressure from weaker demand in areas such as alternative proteins, emulsifiers and sweeteners. The business reported net sales of $802m in the fourth quarter of 2025, down 4% year-on-year, before returning to 3% growth in the first quarter of 2026.
The deal underscores a broader trend of private equity firms targeting large corporate carve-outs, particularly as higher interest rates and macroeconomic uncertainty weigh on traditional leveraged buyout models. Recent comparable transactions include Advent International’s acquisition of Reckitt’s cleaning products arm and Clayton, Dubilier & Rice’s purchase of Sanofi’s consumer health business, alongside CVC Capital Partners’ earlier agreement to acquire DSM-Firmenich’s animal nutrition division.
IFF chief executive Erik Fyrwald said the transaction marks a key step in simplifying the group’s portfolio and concentrating resources on higher-growth, higher-margin segments.
Despite the divestment, IFF reiterated its expectation of meeting full-year 2026 guidance, noting that the deal is expected to dilute adjusted earnings per share once completed.
JPMorgan Chase and Bank of America advised IFF on the sale process.
