Roquette Frères Requests CCI Approval for Acquisition of IFF Pharma Solutions Business

Roquette Frères, a French company specialising in plant-based ingredients, is seeking approval from India's fair trade regulator, the Competition Commission of India (CCI). The approval is for acquiring the pharma solutions business and specific product lines from International Flavors & Fragrances Inc (IFF). Roquette operates in India through subsidiaries like Crest Cellulose and Roquette India.

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The acquisition involves Roquette purchasing equity interests in certain IFF entities. This will include IFF's pharma solutions segment and parts of its Nourish business. The aim is to align customers, businesses, and manufacturing operations. IFF's presence in India is through Danisco Nutrition and Biosciences India.

Market Overlap and Competitive Landscape

Roquette's submission to the CCI highlights limited overlap in India. This pertains to the supply of microcrystalline cellulose (MCC) and croscarmellose sodium (CCS), essential for pharmaceutical applications. A potential vertical linkage exists due to IFF's upstream activities in hydroxypropyl methylcellulose (HPMC) and Roquette's downstream operations in HPMC-based capsules.

Roquette asserts that the acquisition won't raise competition issues due to minimal market overlap. They also note strong competitive constraints in the market. The company believes that defining specific product and geographic markets isn't necessary for assessing competition impacts.

Strategic Acquisition Details

In March 2024, IFF announced a definitive agreement to sell its Pharma Solutions unit to Roquette. The deal values the unit at up to USD 2.85 billion. This business operates 10 research and development or production sites globally, generating around USD 1 billion in revenue in 2023.

The acquisition aims to bolster Roquette's global position in pharmaceutical excipients and ingredients, including in India. Regulatory approval is crucial for finalising this strategic move, which seeks to enhance Roquette's market presence worldwide.

Roquette's acquisition strategy reflects its commitment to expanding its footprint in the pharmaceutical sector. By integrating IFF's pharma solutions business, Roquette aims to strengthen its capabilities and offerings in plant-based ingredients on a global scale.