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Business Divestitures
 9 Months Ended
Sep. 30, 2025
Discontinued Operations and Disposal Groups [Abstract]  
Business Divestitures and Assets and Liabilities Held for Sale BUSINESS DIVESTITURES AND ASSETS AND LIABILITIES HELD FOR SALE
Divestiture of the Pharma Solutions Disposal Group
During March 2024, the Company announced it had entered into an agreement to sell its Pharma Solutions business that is primarily made up of most businesses within the Company’s existing Pharma Solutions reportable operating segment (the “Pharma Solutions disposal group”). The Company completed the divestiture on May 1, 2025, and received gross cash proceeds of approximately $2.564 billion. The sale consideration is subject to certain post-closing adjustments, which are primarily related to cash, working capital balances, and other adjustments per the transaction agreement. There is significant uncertainty regarding the resolution of these post-closing adjustments, which can result in a significant increase or decrease in the total consideration received.
The following table summarizes the fair value of sale consideration received in connection with the business divestiture:
(DOLLARS IN MILLIONS)
Cash proceeds from the buyer$2,564 
Amount held in escrow17 
Earnout consideration100 
Direct costs to sell(30)
Fair value of sale consideration$2,651 

The fair value of sale consideration includes the fair value of the earnout expected to be received from the Buyer of $100 million (representing the full amount of the earnout potentially payable under the transaction agreement). The Company has potential to earn a total of $250 million additional proceeds based on the 2024 and 2025 results of the Pharma Solutions disposal group. The 2024 results and related earnout amount are in process of being finalized with the buyer in a third-party arbitration process. The Company engaged an independent third party to determine the fair value of the expected earnout consideration as of September 30, 2025, which was based on a Monte Carlo simulation. The fair value estimation uses Level 3 unobservable inputs as categorized within the ASC Topic 820 fair value hierarchy. This method considers the terms and conditions of the earnout as described in the relevant transaction agreements, our best estimates of forecasted EBITDA for the earnout periods as applicable, and assumptions such as risk-adjusted discount rate, EBITDA volatility, counterparty discount rate and risk-free rate. The simulation consists first in risk-adjusting the EBITDA projections using a risk-adjusted discount rate and then simulating a range of EBITDA over the applicable period using the estimate of EBITDA volatility. The fair value of the earnout is estimated as the present value of the potential range of payouts averaged across the range of simulated EBITDA using the counterparty discount rate. As the determination of performance of the subject business in 2024 has not been resolved and the actual performance for all of 2025 is not yet known, these estimations are subject to significant uncertainty. Based on the final calculation of 2024 and 2025 results, there could be a significant increase or decrease in the total earnout received by the Company.
The net proceeds received from the business divestiture presented under Cash flows from investing activities represent the cash portion of the sale consideration, reduced by the cash transferred to the buyer as part of the transaction. Amounts paid for direct costs to sell are presented under Cash flows from operating activities.
The following table summarizes the different components of net proceeds received from the business divestiture presented under Cash flows from investing activities:
(DOLLARS IN MILLIONS)
Cash proceeds from the buyer$2,564 
Cash transferred to the buyer(29)
Net Cash flows from investing activities$2,535 
The carrying value of net assets associated with the Pharma Solutions disposal group, adjusted for currency translation adjustment, NCI, and pension adjustments, amounted to approximately $2.772 billion. The major classes of assets and liabilities sold consisted of the following:
(DOLLARS IN MILLIONS)May 1, 2025
Assets
Cash and cash equivalents$29 
Trade receivables, net218 
Inventories289 
Property, plant and equipment, net439 
Goodwill(1)
1,190 
Other intangible assets, net1,093 
Operating lease right-of-use assets68 
Deferred tax assets17 
Other assets116 
Less: Loss recognized on assets held-for-sale(2)
(307)
Total assets3,152 
Liabilities
Accounts payable$(131)
Deferred tax liability(75)
Other liabilities(193)
Total liabilities(399)
Equity
Accumulated other comprehensive income - currency translation adjustment$49 
Accumulated other comprehensive income - pension adjustment(26)
Non-controlling Interests (NCI)(4)
Total equity19 
Carrying value of net assets (adjusted for currency translation, pension, and NCI adjustments)$2,772 
_______________________
(1) The goodwill balance is presented net of $64 million of goodwill impairment recorded in 2024.
(2) A loss was recorded on assets held-for-sale in the amount of $307 million through March 31, 2025.
As a result of the business divestiture, the Company recognized a pre-tax loss of approximately $121 million, subject to certain post-closing adjustments, presented in Losses (gains) on business disposals on the Consolidated Statements of Income (Loss) and Comprehensive Income (Loss) for the nine months ended September 30, 2025. This is in addition to the life-to-date loss on assets classified as held for sale of $307 million recognized through March 31, 2025. $274 million of the loss on assets classified as held for sale was recognized during the nine months ended September 30, 2024. The total income tax expense recognized was approximately $79 million, including approximately $65 million of income tax benefit that was recognized during the year ended December 31, 2024.
Divestiture of the Nitrocellulose business
During October 2024, the Company entered into an agreement to sell its Nitrocellulose business (including the related industrial park in Germany), which was included within the Company’s existing Pharma Solutions reportable operating segment. The Company completed the divestiture on May 9, 2025, and received cash proceeds of approximately $161 million. The sale consideration is subject to certain post-closing adjustments, which are primarily related to cash, working capital balances, and other adjustments per the transaction agreement.
The following table summarizes the fair value of sale consideration received in connection with the business divestiture:
(DOLLARS IN MILLIONS)
Cash proceeds from the buyer$161 
Direct costs to sell(3)
Fair value of sale consideration$158 
The net proceeds received from the business divestiture presented under Cash flows from investing activities represent the cash portion of the sale consideration, which was determined as the fair value of sale consideration adjusted by the cash transferred to the buyer as part of the transaction. Amounts paid for direct costs to sell are presented under Cash flows from operating activities.
The following table summarizes the different components of net proceeds received from the business divestiture presented under Cash flows from investing activities:
(DOLLARS IN MILLIONS)
Cash proceeds from the buyer$161 
Cash transferred to the buyer(9)
Net Cash flows from investing activities$152 
The carrying amount of net assets associated with the Nitrocellulose business, adjusted for currency translation adjustment and pension adjustments, was approximately $148 million. The major classes of assets and liabilities sold consisted of the following:
(DOLLARS IN MILLIONS)May 9, 2025
Assets
Cash and cash equivalents$9 
Trade receivables, net33 
Inventories15 
Property, plant and equipment, net60 
Goodwill77 
Other intangible assets, net19 
Other assets40 
Total assets253 
Liabilities
Accounts payable$(30)
Other liabilities(50)
Total liabilities(80)
Equity
Accumulated other comprehensive income - currency translation adjustment(1)
Accumulated other comprehensive income - pension adjustment(24)
Total equity(25)
Carrying value of net assets (adjusted for currency translation and pension adjustments)$148 
As a result of the business divestiture, the Company recognized a pre-tax gain of approximately $10 million, subject to certain post-closing adjustments, presented in Losses (gains) on business disposals on the Consolidated Statements of Income (Loss) and Comprehensive Income (Loss) for the nine months ended September 30, 2025. The total income tax benefit recognized was approximately $1 million for the nine months ended September 30, 2025.
Divestiture of a Tobacco Flavoring Business in North America
The Company completed the divestiture of the Tobacco Flavoring Business in North America on April 1, 2025, and received gross cash proceeds of approximately $20 million.
As a result of the divestiture, the Company recognized a pre-tax gain of less than $1 million presented in Losses (gains) on business disposals on the Consolidated Statements of Income (Loss) and Comprehensive Income (Loss) for the nine months ended September 30, 2025. The total income tax expense recognized was approximately $5 million for the nine months ended September 30, 2025.
Assets and Liabilities Held for Sale
Sale of Soy Crush, Concentrates & Lecithin Business
On August 5, 2025, the Company announced it had entered into a definitive agreement to divest its Soy Crush, Concentrates, and Lecithin business (the “SCL disposal group”), which is included in the Food Ingredients segment. This sale aligns with IFF’s strategy to strengthen its portfolio and supports the ongoing evaluation of strategic alternatives for the Food Ingredients segment. The transaction is subject to customary closing conditions and is expected to close by the second quarter of 2026.
The sale does not constitute a strategic shift of the Company’s operations and does not, and will not, have major effects on the Company’s operations and financial results considering only the SCL disposal group and not any future divestitures which may be considered as part of the same disposal plan. Therefore, the transaction does not meet the discontinued operations criteria.
The Company determined that the assets and liabilities of the SCL disposal group met the criteria to be presented as “held for sale” during the third quarter of 2025. As a result, as of September 30, 2025, such assets and liabilities were classified as held for sale on the Consolidated Balance Sheets.
The Company determined that the fair value of $108 million (fair value of $110 million less estimated costs to sell of $2 million) of the disposal group was less than its book value. As such, the Company recorded an impairment loss of $108 million in the third quarter of 2025 to adjust the net book value of this business to its fair value less costs to sell. The Company recorded the loss on classification of held for sale as a valuation allowance on the group of assets held for sale, without allocation to the individual assets or major classes of assets within the group. Due to the nature of estimates, the carrying value is subject to change based on developments leading up to the closing date, and the actual amounts realized upon sale may be more than or less than the estimated carrying value of the disposal group. Any difference will be recognized as a gain or loss in future financial statements.
For the three and nine months ended September 30, 2025, the Company recognized total income tax benefits of approximately $25 million related to loss on assets classified as held for sale for the SCL disposal group.
Carrying Amount of Assets and Liabilities Held for Sale
The Company’s Consolidated Balance Sheet as of September 30, 2025 included the carrying amounts of the assets and liabilities of the SCL disposal group as held for sale.
The Company’s Consolidated Balance Sheet as of December 31, 2024 included the carrying amounts of the assets and liabilities of the Pharma Solutions disposal group, Nitrocellulose disposal group, and a portion of the Savory Solutions business in Turkey as held for sale. The Company completed the sale of a portion of the Savory Solutions business in Turkey during the three months ended March 31, 2025, and the sale of the Pharma Solutions disposal group and Nitrocellulose disposal group during the three months ended June 30, 2025.
(DOLLARS IN MILLIONS)September 30, 2025December 31, 2024
Assets
Cash and cash equivalents$— $2 
Trade receivables, net16 187 
Inventories48 274 
Property, plant and equipment, net92 451 
Goodwill— 1,216 
Other intangible assets, net88 1,078 
Operating lease right-of-use assets7 57 
Other assets9 108 
Less: Loss recognized on assets held-for-sale(108)(317)
Total assets held-for-sale$152 $3,056 
Liabilities
Accounts payable$35 $90 
Deferred tax liability— 51 
Other liabilities9 191 
Total liabilities held-for-sale$44 $332