New York — International Flavors and Fragrances (I.F.F.) has entered into an agreement to acquire Frutarom, Tel Aviv, Israel, for approximately $7.1 billion. The transaction has been approved by the boards of directors of both companies, and Frutarom’s shareholders will receive for each Frutarom share $71.19 in cash and 0.249 of a share of I.F.F. common stock, which represents a total value of $106.25 per share.

Frutarom is a manufacturer of flavors and savory solutions. The company primarily is focused on natural ingredients, which generate more than 75% of annual sales and are forecast to be approximately $1.6 billion in 2018.

“Frutarom has an extremely attractive product portfolio, including broad expertise in naturals and diverse adjacencies with capabilities beyond our core taste and scent businesses,” said Andreas Fibig, chairman and chief executive officer of I.F.F. “It also has significant exposure to complementary and fast-growing small- and mid-sized customers.

“By combining our deep R.&D. expertise with Frutarom’s, we are offering our customers a broader range of solutions and accelerating our growth strategy. We believe this combination will lead to faster and more profitable growth, enhanced free cash flow and generate greater returns for our shareholders.”

The combination of I.F.F. and Frutarom is expected to generate approximately $5.3 billion in sales during the rest of 2018. I.F.F. expects the acquisition to create an estimated $145 million in synergies by the third full year following the closing of the transaction.

Following the close of the transaction, Ori Yehudai, president and c.e.o. of Frutarom, will serve as a strategic adviser supporting Mr. Fibig.

“Frutarom has had a fascinating journey of accelerated growth, far above our industry benchmarks through our investment in unique technologies and focus on natural products in the growing world of health and taste,” Mr. Yehudai said. “Today, we are extremely excited to combine Frutarom with I.F.F. and together create global leadership in natural taste, scent and nutrition. The growth potential for the combined company is substantial, and our shareholders will continue to enjoy this upside.”

The transaction is expected to close in six to nine months and is subject to approval by Frutarom shareholders as well as customary closing conditions.