Ester Baiget is marking her third anniversary as CEO of Novozymes by announcing a merger with Chr Hansen. Rather than take the credit, she insists it was a deal waiting to happen.
Novozymes has long held the view the two Danish biotech companies belong together. Now especially so, she said.
It’s a pivotal moment for the biotech industry and the two firms are better off together as a “biotech powerhouse” as the industrial world increasingly turns to enzymes, bacteria and fermentation to satisfy consumer demands, Baiget said in an interview with chemicalESG.
“The strategic rationale is so clear. For me, the question is why the right time is now,” Baiget added.
Scale is becoming increasingly important. Having a large R&D capability and the means to cross-sell products and make new customer connections affords a higher return on your investments in new technology, she added. In some cases, the same enzyme or culture can be applied across multiple markets, whether it’s extending the shelf life of bakery products or alt-meat burgers.
Novozymes says the current addressable market for biological solutions is about EU15 billion and growing, and it cited a World Economic Forum prediction that it will triple by 2040 on population growth and limited natural resources.
There’s no doubt the one-stop-shop approach is catching on as a commercial strategy. It was the driving force behind International Flavors & Fragrances acquisition of DuPont’s Nutrition & Biosciences business, and it brought Royal DSM and the privately-held Firmenich together.
The boundaries for Novozymes only extend as far as biotechnology. For Novo Holdings A/S, a foundation-owned investment company that’s the largest shareholder in both companies, the desire to create a Danish champion was compelling.
Baiget said the shared Danish culture, sustainability/ESG views and heritage are a strength, but it’s not one that should be overplayed: “there’s still a hell of a lot of work.”
Novozymes will be rebranded — including dropping the “zymes” for something more biotechy — and it will move to a new headquarters in Denmark.
Baiget will be drawing on her 25-year experience at Dow that included the unravelling of the K-Dow petrochemicals project, the sale of PP, Rohm & Haas, Dow Corning, the Dow-DuPont merger, and its subsequent breakup. A taskforce will lead the integration and ensure alignment across the combined group. Besides, an “extensive” amount of “high-quality” work was done both internally and with external advisers to ensure the numbers are achievable and the regulatory path is a smooth one.