424B3 1 d792766d424b3.htm 424B3 424B3
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Filed Pursuant to Rule 424(b)(3)

Registration No. 333-238072


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PROSPECTUS—OFFER TO EXCHANGE

DuPont de Nemours, Inc.

Offer to Exchange all Shares of Common Stock of

NUTRITION & BIOSCIENCES, INC.

which are owned by DuPont de Nemours, Inc.

and will be converted into Shares of Common Stock of

INTERNATIONAL FLAVORS & FRAGRANCES INC.

for

Shares of Common Stock of DuPont de Nemours, Inc.

 

 

DuPont de Nemours, Inc. (“DuPont”) is offering to exchange all shares of common stock (“N&B common stock”) of Nutrition & Biosciences, Inc. (“N&B”) owned by DuPont for shares of common stock of DuPont (“DuPont common stock”) that are validly tendered and not properly withdrawn. The number of shares of DuPont common stock that will be accepted if the Exchange Offer (as defined below) is completed will depend on the final exchange ratio and the number of shares of DuPont common stock tendered. The terms and conditions of the Exchange Offer are described in this prospectus, which you should read carefully. None of DuPont, N&B, any of their respective directors or officers nor any of their respective representatives makes any recommendation as to whether you should participate in the Exchange Offer. You must make your own decision after reading this prospectus and consulting with your advisors. The Exchange Offer is voluntary. If you would like to keep all of your shares of DuPont common stock, you do not need to take any action.

DuPont’s obligation to exchange shares of N&B common stock for shares of DuPont common stock is subject to the satisfaction of certain conditions, including conditions to the consummation of the Transactions (as defined below), which include approval by the shareholders of International Flavors & Fragrances Inc. (“IFF”) of the issuance of shares of common stock of IFF (“IFF common stock”) in the Merger (as defined below) (IFF’s shareholders approved the issuance of shares of IFF common stock in the Merger at a special meeting on August 27, 2020).

The Transactions are being undertaken to transfer the N&B Business (as defined below) from DuPont to IFF. The aggregate value of the consideration to be paid to DuPont stockholders with respect to the N&B Business in the Transactions is estimated to be approximately $15.813 billion in value of IFF common stock (calculated based on the closing price on the New York Stock Exchange (the “NYSE”) of IFF common stock as of December 30, 2020 and assuming a Share Issuance (as defined below) of 142,122,386) issuable to DuPont stockholders that participate in the Exchange Offer or receive shares in the Clean-Up Spin-Off (as defined below) if the Exchange Offer is not fully subscribed because the number of shares of DuPont common stock tendered and accepted results in fewer than all shares of N&B common stock being exchanged. Assuming no adjustment to the Special Cash Payment (as defined below), this stock consideration combined with the Special Cash Payment would result in an overall value of approximately $23.119 billion received by DuPont and DuPont stockholders in connection with the Transactions.

Immediately following the distribution of shares of N&B common stock to DuPont stockholders (the “Distribution”), a wholly owned subsidiary of IFF named Neptune Merger Sub I Inc., a Delaware corporation (“Merger Sub I”), will be merged with and into N&B, whereby the separate corporate existence of Merger Sub I will cease and N&B will continue as the surviving company and a wholly owned subsidiary of IFF (the “Merger”). In the Merger, each outstanding share of N&B common stock (except for shares of N&B common stock held by N&B as treasury stock or by DuPont, which will be automatically cancelled) will be automatically converted into the right to receive a number of shares of IFF common stock equal to the exchange ratio set forth in the Merger Agreement. The aggregate number of shares of IFF common stock to be issued in the Merger by IFF is expected to result in pre-Merger holders of shares of N&B common stock collectively owning approximately 55.4% of the issued and outstanding shares of IFF common stock on a fully diluted basis after giving effect to the Merger and IFF’s existing shareholders collectively owning approximately 44.6% of the issued and outstanding shares of IFF common stock on a fully diluted basis (in each case, excluding any overlaps in the pre-Merger stockholder bases). N&B common stock will not be transferred to participants in the Exchange Offer; such participants will instead receive shares of IFF common stock in the Merger. No trading market currently exists for N&B common stock. You will not be able to trade shares of N&B common stock before they are converted into shares of IFF common stock in the Merger. In addition, there can be no assurance that shares of IFF common stock, when issued in the Merger, will trade at the same prices that shares of IFF common stock are traded at prior to the Merger.

The value of DuPont common stock and N&B common stock will be determined by DuPont by reference to the simple arithmetic average of the daily volume-weighted average prices (“VWAP”) on each of the Valuation Dates (as defined below) of DuPont common stock on the NYSE and IFF common stock on the NYSE on each of the last full three trading days ending on and including the second trading day preceding the expiration date of the Exchange Offer period (“Valuation Dates”), as it may be voluntarily extended. Based on an expiration date of January 29, 2021, the Valuation Dates are expected to be January 25, 2021, January 26, 2021 and January 27, 2021. See “The Exchange Offer—Terms of the Exchange Offer.”

The Exchange Offer is designed to permit you to exchange your shares of DuPont common stock for shares of N&B common stock at a 7% discount to the per-share value of IFF common stock, calculated as set forth in this prospectus, subject to the upper limit described below. For each $100 of DuPont common stock accepted in the Exchange Offer, you will receive approximately $107.53 of N&B common stock, subject to an upper limit of 0.7180 shares of N&B common stock per share of DuPont common stock. The Exchange Offer does not provide for a minimum exchange ratio. See “The Exchange Offer—Terms of the Exchange Offer.” If the upper limit is in effect, then the exchange ratio will be fixed at that limit. IF THE UPPER LIMIT IS IN EFFECT, AND UNLESS YOU PROPERLY WITHDRAW YOUR SHARES, YOU WILL RECEIVE LESS THAN $107.53 OF N&B COMMON STOCK FOR EACH $100 OF DUPONT COMMON STOCK THAT YOU TENDER, AND YOU COULD RECEIVE MUCH LESS.


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The indicative exchange ratio that would have been in effect following the official close of trading on the NYSE on December 30, 2020, based on the daily VWAPs of DuPont common stock and IFF common stock on December 28, 2020, December 29, 2020 and December 30, 2020 would have provided for 0.6762 shares of N&B common stock to be exchanged for every share of DuPont common stock accepted. The value of N&B common stock received and, following the Merger, the value of IFF common stock received may not remain above the value of DuPont common stock tendered following the expiration of the Exchange Offer.

THE EXCHANGE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT ONE MINUTE AFTER 11:59 P.M., NEW YORK CITY TIME, ON JANUARY 29, 2021 UNLESS THE OFFER IS EXTENDED OR TERMINATED. SHARES OF DUPONT COMMON STOCK TENDERED PURSUANT TO THE EXCHANGE OFFER MAY BE WITHDRAWN AT ANY TIME PRIOR TO THE EXPIRATION OF THE EXCHANGE OFFER.

 

 

In reviewing this prospectus, you should carefully consider the risk factors beginning on page 65 of this prospectus.

We Are Not Asking You for a Proxy and You are Requested Not To Send Us a Proxy.

Neither the U.S. Securities and Exchange Commission (the “SEC”) nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

The date of this prospectus is December 31, 2020.

The final exchange ratio used to determine the number of shares of N&B common stock that you will receive for each share of DuPont common stock accepted in the Exchange Offer will be announced by press release no later than 11:59 p.m., New York City time, at the end of the second trading day immediately preceding the expiration date. At such time, the final exchange ratio will be available at www.dupontexchangeoffer.com and from the information agent at the toll-free number provided on the back cover of this prospectus. DuPont will announce whether the upper limit on the number of shares that can be received for each share of DuPont common stock tendered will be in effect, through www.dupontexchangeoffer.com and by press release, no later than 11:59 p.m., New York City time, at the end of the second trading day immediately preceding the expiration date. Starting at the end of the third trading day of the Exchange Offer, indicative exchange ratios (calculated in the manner described in this prospectus) will also be available on that website and from the information agent at the toll-free number provided on the back cover of this prospectus.

This prospectus provides information regarding DuPont, N&B, IFF, the Exchange Offer, the Clean-Up Spin-Off and the Merger. DuPont stock is listed on the NYSE under the symbol “DD.” IFF common stock is listed on the NYSE and the Tel Aviv Stock Exchange (“TASE”) under the symbol “IFF.” On October 20, 2020, IFF announced that it is voluntarily delisting its shares of common stock from trading on the TASE, which will become effective on January 20, 2021. On November 19, 2020, IFF announced that it is voluntarily delisting its shares of common stock from trading on the Euronext Paris, which became effective on December 18, 2020. On December 30, 2020, the last reported sale price of DuPont common stock on the NYSE was $70.30 per share, and the last reported sale price of IFF common stock on the NYSE was $111.26 per share. The market prices of DuPont common stock and of IFF common stock will fluctuate prior to the completion of the Exchange Offer and thereafter and may be higher or lower at the expiration date than the prices set forth above. No trading market currently exists for N&B common stock. N&B has not applied for listing of N&B common stock on any exchange.

Following the Exchange Offer, the remaining shares of N&B common stock held by DuPont (if the Exchange Offer is not fully subscribed because the number of shares of DuPont common stock that have been tendered and accepted results in fewer than all outstanding shares of N&B common stock being exchanged), will be distributed to DuPont stockholders as of the record date, other than in respect of any shares tendered and accepted in the Exchange Offer, pursuant to a pro rata distribution in the Clean-Up Spin-Off. Any DuPont stockholder who validly tenders (and does not properly withdraw) shares of DuPont common stock for shares of N&B common stock and whose shares are accepted in the Exchange Offer will waive their rights with respect to such shares to receive, and forfeit any rights to, shares of N&B common stock distributed on a pro rata basis to DuPont stockholders in the Clean-Up Spin-Off. This prospectus covers all shares of N&B common stock offered by DuPont in the Exchange Offer and all shares of N&B common stock that may be distributed by DuPont in the Clean-Up Spin-Off (or, if the Exchange Offer is terminated by DuPont, the Spin-Off (as defined below)) to holders of shares of DuPont common stock. If the Exchange Offer is terminated by DuPont without the exchange of shares (but the conditions to consummation of the Transactions have otherwise been satisfied), all shares of N&B common stock owned by DuPont will be distributed in a spin-off on a pro rata basis to holders of DuPont common stock, with a record date to be announced by DuPont (the “Spin-Off”). See “The Exchange Offer—Distribution of N&B Common Stock Remaining After the Exchange Offer.”

Following the consummation of the Distribution, in the Merger, Merger Sub I will be merged with and into N&B, whereby the separate corporate existence of Merger Sub I will cease and N&B will continue as the surviving company. In the Merger, each outstanding share of N&B common stock (except for shares of N&B common stock held by N&B as treasury stock or by DuPont, which will be cancelled) will be automatically converted into the right to receive a number of shares of IFF common stock equal to the exchange ratio set forth in the Merger Agreement. The aggregate number of shares of IFF common stock to be issued in the Merger by IFF is expected to result in pre-Merger holders of shares of N&B common stock collectively owning approximately 55.4% of the issued and outstanding shares of IFF common stock on a fully diluted basis after giving effect to the Merger and IFF’s existing shareholders collectively owning approximately 44.6% of the issued and outstanding shares of IFF common stock on a fully diluted basis (in each case, excluding any overlaps in the pre-Merger shareholder bases).

No fewer than 30 days (and in some circumstances 15 days) following the Merger, N&B will be merged with and into Neptune Merger Sub II LLC, a Delaware limited liability company (“Merger Sub II”), which is a wholly owned subsidiary of IFF, whereby the separate corporate existence of N&B will cease and Merger Sub II will continue as the surviving company (such merger, the “Second Merger” and together with the Merger, the “Mergers”).

DuPont’s obligation to exchange shares of N&B common stock for IFF common stock is subject to the conditions listed under “The Exchange Offer—Conditions to Consummation of the Exchange Offer,” including the satisfaction of conditions to the Merger.


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TABLE OF CONTENTS

 

HELPFUL INFORMATION

     1  

QUESTIONS AND ANSWERS ABOUT THE EXCHANGE OFFER AND THE TRANSACTIONS

     9  

Questions and Answers about the Exchange Offer

     9  

Questions and Answers about this Prospectus, the Transactions and Related Steps

     24  

SUMMARY

     36  

The Companies

     36  

The Transactions

     37  

The Separation and the Distribution

     40  

The Merger

     41  

Terms of the Exchange Offer

     42  

Debt Financing

     48  

Risk Factors

     48  

Opinions of IFF’s Financial Advisors

     51  

Board of Directors and Management of IFF Following the Transactions

     51  

Interests of Certain Persons in the Transactions

     52  

Treatment of DuPont Equity Awards

     53  

IFF’s Shareholders Meeting

     53  

Accounting Treatment and Considerations

     53  

U.S. Federal Income Tax Consequences of the Transactions

     54  

Regulatory Approvals

     54  

SUMMARY HISTORICAL AND PRO FORMA FINANCIAL DATA

     56  

Summary Historical Combined Financial Data of the N&B Business

     56  

Summary Historical Consolidated Financial Data of DuPont

     57  

Summary Historical Consolidated Financial Data of IFF

     58  

Summary Unaudited Pro Forma Consolidated Financial Data of DuPont

     59  

Summary Unaudited Combined Pro Forma Financial Data of IFF and the N&B Business

     61  

Summary Comparative Historical and Pro Forma Per Share Data

     62  

Comparison of Market Prices

     64  

RISK FACTORS

     65  

Risks Related to the Transactions

     65  

Risks Related to the Exchange Offer

     72  

Risks Related to the Combined Company’s Business Following the Transactions

     75  

CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS

     102  

THE EXCHANGE OFFER

     105  

Terms of the Exchange Offer

     105  

Conditions to Consummation of the Exchange Offer

     119  

Fees and Expenses

     121  

Legal Limitations

     121  

Certain Matters Relating to Non-U.S. Jurisdictions

     121  

Distribution of N&B Common Stock Remaining After the Exchange Offer

     122  

INFORMATION ON IFF

     124  

Overview

     124  

IFF’s Business After the Transactions

     124  

IFF’s Liquidity and Capital Resources After the Transactions

     126  

Directors and Officers of IFF Before and After the Transactions

     127  

Executive Officers

     130  

 

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INFORMATION ON DUPONT

     134  

INFORMATION ON THE N&B BUSINESS

     136  

Overview

     136  

Strategy

     136  

Key Raw Materials

     137  

Distribution

     137  

Backlog

     138  

Seasonality

     138  

International

     138  

Employees

     138  

Working Capital

     139  

Intellectual Property

     139  

Research & Development

     139  

Regulatory Environment

     140  

Legal Proceedings

     140  

Properties

     140  

HISTORICAL MARKET PRICE DATA AND DIVIDEND INFORMATION

     141  

Comparative Historical and Pro Forma Per Share Data

     141  

Comparison of Market Prices

     142  

IFF Dividend Policy

     142  

DuPont Dividend Policy

     142  

SELECTED FINANCIAL STATEMENT DATA

     142  

Selected Historical Combined Financial Data of the N&B Business

     142  

Selected Historical Consolidated Financial Data of DuPont

     143  

Selected Historical Consolidated Financial Data of IFF

     145  

DUPONT’S UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS

     147  

UNAUDITED CONDENSED COMBINED PRO FORMA INFORMATION OF IFF AND THE N&B BUSINESS

     158  

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS FOR THE N&B BUSINESS

     183  

Analysis of Operations

     186  

Results of Operations

     187  

Other Matters

     202  

THE TRANSACTIONS

     208  

Overview

     208  

Transaction Steps

     209  

The Separation and the Distribution

     212  

The Merger

     213  

Background of the Transactions

     214  

IFF’s Reasons for the Transactions

     227  

Opinion of Greenhill & Co., LLC

     231  

Opinion of Morgan Stanley & Co. LLC

     240  

Certain Financial Forecasts Prepared by IFF

     249  

DuPont’s Reasons for the Transactions

     254  

Certain Financial Forecasts Prepared by DuPont

     257  

Ownership of IFF Following the Transactions

     260  

 

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Board of Directors and Management of IFF Following the Transactions

     260  

Interests of DuPont’s and N&B’s Directors and Executive Officers in the Transactions

     261  

Interests of IFF’s Directors and Executive Officers in the Transactions

     262  

Effects of the Distribution and the Merger on DuPont Equity Awards

     267  

IFF’s Shareholders Meeting

     269  

Accounting Treatment and Considerations

     269  

Regulatory Approvals

     270  

THE MERGER AGREEMENT

     271  

The Merger

     271  

Closing; Effective Time

     271  

Merger Consideration

     271  

Distribution of Per Share Merger Consideration

     272  

Distributions With Respect to Shares of IFF Common Stock after the Effective Time of the Merger

     272  

Termination of the Exchange Fund

     273  

Post-Closing IFF Board of Directors and Officers

     273  

Shareholders Meeting

     273  

Representations and Warranties

     274  

Conduct of Business Pending the Merger

     276  

Tax Matters

     282  

SEC Filings

     282  

Regulatory Matters

     282  

Board Recommendation

     286  

Financing

     287  

Non-Solicitation of Employees

     289  

Certain Other Covenants and Agreements

     289  

Conditions to the Merger

     291  

Termination Fees and Expenses Payable in Certain Circumstances

     294  

Specific Performance

     295  

Governing Law; Jurisdiction

     295  

Amendments

     295  

THE SEPARATION AGREEMENT

     296  

The Separation

     296  

Conditions to the Internal Reorganization

     304  

The Distribution

     304  

Conditions to the Distribution

     305  

IFF Guarantee

     305  

Mutual Releases; Indemnification

     305  

Termination

     307  

Dispute Resolution

     307  

Other Matters

     307  

DEBT FINANCING

     308  

Overview

     308  

Term Loan Facility

     308  

Bridge Facility

     309  

N&B Notes

     309  

 

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OTHER AGREEMENTS

     312  

Employee Matters Agreement

     312  

Tax Matters Agreement

     315  

Voting Agreement

     316  

Transition Services Agreements

     318  

Lease Agreements

     318  

Site Services Agreement

     318  

Supply Agreement

     319  

IP Cross-License

     319  

Trademark Cross-License Agreement

     319  

Regulatory Transfer and Support Agreement

     320  

Regulatory Cross-License Agreement

     320  

Umbrella Secrecy Agreement

     320  

TMODS License Agreement

     320  

DESCRIPTION OF CAPITAL STOCK OF IFF AND THE COMBINED COMPANY

     321  

General

     321  

Common Stock

     321  

Certain Anti-Takeover Effects of Provisions of the IFF Charter and the IFF Bylaws

     322  

Listing

     323  

Transfer Agent

     323  

DESCRIPTION OF N&B COMMON STOCK

     324  

N&B Common Stock

     324  

N&B Bylaws

     325  

COMPARISON OF RIGHTS OF HOLDERS OF DUPONT COMMON STOCK AND IFF COMMON STOCK

     326  

Authorized Capital Stock

     326  

Certain Anti-Takeover Effects of Provisions of the IFF Charter, the IFF Bylaws and New York Law

     340  

U.S. FEDERAL INCOME TAX CONSEQUENCES OF THE TRANSACTIONS

     341  

Treatment of the Distribution

     341  

Treatment of the Mergers

     343  

SECURITY OWNERSHIP OF IFF COMMON STOCK

     345  

SECURITY OWNERSHIP OF DUPONT COMMON STOCK

     348  

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     350  

LEGAL MATTERS

     350  

EXPERTS

     350  

INDEPENDENT ACCOUNTANTS

     351  

WHERE YOU CAN FIND MORE INFORMATION; INCORPORATION BY REFERENCE

     351  

DuPont:

     352  

IFF:

     353  

INDEX TO FINANCIAL PAGES

     F-1  

Annex A - Opinion of Greenhill & Co., LLC

     A-1  

Annex B - Opinion of Morgan Stanley & Co. LLC

     B-1  

 

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This prospectus incorporates by reference important business and financial information about DuPont and IFF from documents filed with the SEC that have not been included in or delivered with this prospectus. This information is available without charge at the website that the SEC maintains at www.sec.gov, as well as from other sources. See “Where You Can Find More Information; Incorporation By Reference.” You also may ask any questions about the Exchange Offer or request copies of the Exchange Offer documents and the other information incorporated by reference in this prospectus, without charge, upon written or oral request to DuPont’s information agent, Georgeson LLC, located at 1290 Avenue of the Americas, 9th Floor, New York, NY 10104, at the telephone number 888-660-8331. In order to receive timely delivery of the documents, you must make your requests no later than January 22, 2021.

All information contained or incorporated by reference in this prospectus with respect to IFF, Merger Sub I, Merger Sub II and their respective subsidiaries, as well as information on IFF after the consummation of the Transactions, has been provided by IFF. All other information contained or incorporated by reference in this prospectus with respect to DuPont, N&B or their respective subsidiaries, or the N&B Business, and with respect to the terms and conditions of the Exchange Offer, has been provided by DuPont.

This prospectus is not an offer to sell or exchange and it is not a solicitation of an offer to buy any shares of DuPont common stock, N&B common stock or IFF common stock in any jurisdiction in which the offer, sale or exchange is not permitted. Non-U.S. stockholders should consult their advisors in considering whether they may participate in the Exchange Offer in accordance with the laws of their home countries and, if they do participate, whether there are any restrictions or limitations on transactions in the shares of N&B common stock that may apply in their home countries. DuPont, N&B and IFF cannot provide any assurance about whether such limitations may exist. See “The Exchange Offer—Certain Matters Relating to Non-U.S. Jurisdictions” for additional information about limitations on the Exchange Offer outside the United States.

 

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HELPFUL INFORMATION

Certain abbreviations and terms used in the text and notes are defined below:

 

Abbreviation/Term

  

Description

Ancillary Agreements

   The Tax Matters Agreement, the Employee Matters Agreement, the Intellectual Property Cross-License Agreement, the Trademark Cross-License Agreement, the Regulatory Cross-License Agreement, the Umbrella Secrecy Agreement, the Regulatory Transfer and Support Agreement, TMODS License Agreement, Transition Services Agreements, Supply Agreement, Space Leases and the other agreements set forth in the Separation Agreement and any other agreements to be entered into by and between any member of the N&B Group and any member of the DuPont Group, at, prior to or after the Distribution in connection with the Distribution (to the extent consented to by IFF), but shall exclude any conveyancing and assumption instruments and the Merger Agreement

Benefit Plan

   All employee or director compensation and benefit plans, programs, agreements, policies or arrangements, including any employment, severance, welfare (including medical, dental, vision and life insurance), cafeteria, retirement, savings and other deferred compensation plans, programs, agreements, policies or arrangements

Clean-Up Spin-Off

   The distribution by DuPont following the consummation of the Exchange Offer, if the Exchange Offer is not fully subscribed, of the remaining shares of N&B common stock owned by DuPont on a pro rata basis to DuPont stockholders as of the record date (subject to the fact that such stockholders will have waived their rights to receive shares in the distribution with respect to any shares of DuPont common stock tendered and accepted in the Exchange Offer)

Code

   The Internal Revenue Code of 1986, as amended

Collective Bargaining Agreement

   A collective bargaining agreement, labor agreement or similar written contract with a labor union, labor organization or other employee representative body and each written contract with a works council

DGCL

   General Corporation Law of the State of Delaware

Distribution

   The distribution by DuPont, pursuant to the Separation Agreement, of 100% of the shares of N&B common stock to DuPont’s stockholders in the Exchange Offer with the Clean-Up Spin-Off to the extent required, or the Spin-Off

 

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Abbreviation/Term

  

Description

Distribution Date

   The date, as shall be determined by the board of DuPont, on which DuPont distributes all of the issued and outstanding shares of N&B common stock to the holders of DuPont common stock

DuPont

   Depending on context, either DuPont de Nemours, Inc. or DuPont de Nemours, Inc. and its consolidated subsidiaries

DuPont Benefit Plan

   Any Benefit Plan sponsored or maintained by DuPont or any member of the DuPont Group

DuPont Bylaws

   DuPont’s Fourth Amended and Restated Bylaws, effective June 1, 2019 (as they may be amended)

DuPont Charter

   DuPont’s Second Amended and Restated Certificate of Incorporation, effective June 1, 2019 (as it may be amended)

DuPont common stock

   The common stock, par value $0.01 per share, of DuPont

DuPont Equity Award

   Any outstanding DuPont Option, DuPont Stock Appreciation Right, DuPont RSU Award, DuPont Restricted Stock Award, DuPont PSU Award and other equity incentive compensation award that was granted under the DuPont Incentive Plan

DuPont Group

   DuPont and each of its subsidiaries and any legal predecessors thereto, but excluding any member of the N&B Group

DuPont Incentive Plan

   DuPont’s Omnibus Incentive Plan and any other equity compensation plan or arrangement maintained by DuPont

DuPont Option

   Each option to purchase shares of DuPont common stock from DuPont, whether granted by DuPont pursuant to the DuPont Incentive Plan, assumed by DuPont in connection with any merger, acquisition or similar transaction or otherwise issued or granted and whether vested or unvested

DuPont PSU Award

   Each stock unit representing the right to be issued shares of DuPont common stock by DuPont upon the satisfaction of a performance-based vesting requirement, whether granted by DuPont pursuant to the DuPont Incentive Plan, assumed by DuPont in connection with any merger, acquisition or similar transaction or otherwise issued or granted and whether vested or unvested

DuPont Restricted Stock Award

   Each restricted stock award in respect of shares of DuPont common stock, whether granted by DuPont pursuant to the DuPont Incentive Plan, assumed by DuPont in connection with any merger, acquisition or similar transaction or otherwise issued or granted and whether vested or unvested

 

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Abbreviation/Term

  

Description

DuPont RSP

   The DuPont Retirement Savings Plan

DuPont RSU Award

   Each restricted stock unit representing the right to vest in and be issued shares of DuPont common stock by DuPont, whether granted by DuPont pursuant to a DuPont Incentive Plan, assumed by DuPont in connection with any merger, acquisition or similar transaction or otherwise issued or granted and whether vested or unvested

DuPont Stock Appreciation Right

   Each stock appreciation right in respect of DuPont common stock, whether granted by DuPont pursuant to the DuPont Incentive Plan, assumed by DuPont in connection with any merger, acquisition or similar transaction or otherwise issued or granted and whether vested or unvested

Employee Matters Agreement

   The Employee Matters Agreement, dated as of December 15, 2019, by and among DuPont, N&B and IFF

Exchange Act

   The Securities Exchange Act of 1934, as amended

Exchange Offer

   The exchange offer to which this prospectus relates, whereby DuPont is offering to its stockholders (on the terms, and subject to the conditions, herein) the ability to exchange all or a portion of their shares of DuPont common stock for shares of N&B common stock, which N&B common stock will be immediately exchanged for IFF common stock in the Merger

GAAP

   Generally accepted accounting principles in the United States

HSR Act

   The Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended

IFF

   International Flavors & Fragrances Inc.

IFF Bylaws

   IFF’s Bylaws (as they may be amended)

IFF Charter

   IFF’s Restated Certificate of Incorporation (as it may be amended)

IFF common stock

   The common stock, par value $0.125 per share, of IFF

IFF Companies

   IFF and each of IFF’s subsidiaries, including Merger Sub I and Merger Sub II

IFF Equity Awards

   Any outstanding LTIP Award, IFF Option, IFF PRSU, IFF RSU, IFF SSAR and other equity incentive compensation award that was granted under the IFF Incentive Plan

IFF Form S-4 Registration Statement

   IFF’s registration statement on Form S-4 filed with the SEC in connection with the issuance of IFF common stock pursuant to the Merger, as such registration statement may be amended prior to the time it becomes effective under the Securities Act

 

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Abbreviation/Term

  

Description

IFF Incentive Plan

   IFF’s 2015 Stock Award and Incentive Plan and any other equity compensation plan or arrangement maintained by IFF

IFF Option

   Each option to purchase shares of IFF common stock from IFF, whether granted by IFF pursuant to the IFF Incentive Plan, assumed by IFF in connection with any merger, acquisition or similar transaction or otherwise issued or granted and whether vested or unvested

IFF PRSU

   Each purchased restricted stock unit representing the right to vest in and be issued shares of IFF common stock by IFF, purchased pursuant to the IFF Incentive Plan

IFF RSU

   Each restricted stock unit representing the right to vest in and be issued shares of IFF common stock by IFF, whether granted by IFF pursuant to the IFF Incentive Plan, assumed by IFF in connection with any merger, acquisition or similar transaction or otherwise issued or granted and whether vested or unvested

IFF SSAR

   Each stock-settled appreciation right in respect of IFF common stock, whether granted by IFF pursuant to the IFF Incentive Plan, assumed by IFF in connection with any merger, acquisition or similar transaction or otherwise issued or granted and whether vested or unvested

Indenture

  

The indenture, dated September 16, 2020, between N&B and U.S. Bank National Association, as

trustee

Intellectual Property Cross-License Agreement

   The Intellectual Property Cross-License Agreement substantially in the form attached to the registration statement of which this prospectus forms a part and to be entered into at or prior to the Distribution Date

Internal Reorganization

   The transfer and/or assignment and assumption of certain N&B Assets, N&B Liabilities, Excluded Assets and Excluded Liabilities in furtherance of the Separation and the Parent Contribution

LTIP Award

   Each performance cash and share in the form of long-term incentive plan awards granted by IFF pursuant to the IFF Incentive Plan

Merger

   The merger of Merger Sub I with and into N&B, with N&B surviving the merger as a wholly owned subsidiary of IFF, as contemplated by the Merger Agreement

Merger Agreement

   The Agreement and Plan of Merger, dated as of December 15, 2019, by and among DuPont, IFF, N&B and Merger Sub I (as it may be amended from time to time)

 

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Abbreviation/Term

  

Description

Merger Sub I

   Neptune Merger Sub I Inc., a wholly owned subsidiary of IFF

Merger Sub II

   Neptune Merger Sub II LLC, a wholly owned subsidiary of IFF

N&B

   Nutrition & Biosciences, Inc., a Delaware corporation and currently a wholly owned subsidiary of DuPont

N&B Assets

   The assets allocated to N&B and the members of the N&B Group described in the section of this document entitled “The Separation Agreement—The Separation—Transfer of Assets”

N&B Benefit Plan

   Any Benefit Plan sponsored or maintained by N&B or any member of the N&B Group that is in place immediately prior to the Distribution

N&B Business

   The nutrition and biosciences business of DuPont

N&B Bylaws

   The Bylaws of N&B, dated as of October 30, 2019 (as they may be amended)

N&B Certificate of Incorporation

   The Amended and Restated Certificate of Incorporation of N&B, dated as of December 4, 2020 (as it may be amended)

N&B common stock

   The common stock, par value $0.01 per share, of N&B

N&B Companies

   N&B and its subsidiaries, after giving effect to the Separation and the Parent Contribution

N&B Debt Financing

   The indebtedness to be incurred by N&B under the Term Loan Facility and incurred by N&B in the issuance of the Notes, in each case, in connection with the transactions contemplated by the Separation Agreement and the Merger Agreement, as described in the section of this document entitled “Debt Financing”

N&B Dedicated Employee

   Each individual described in Section 1.01(a)(i) of the Employee Matters Agreement (and, for the avoidance of doubt, not including any individual in a shared corporate or functional role to be identified pursuant to Section 1.01(a)(ii) of the Employee Matters Agreement)

N&B Employee

   Each employee who is employed as of the Separation Date and is: (i) an N&B Dedicated Employee, (ii) identified through a process for talent selection to fill a shared corporate or functional department listed in Schedule 1.01(a)(ii) of the Employee Matters Agreement, (iii) hired by DuPont prior to the Distribution, as permitted under the Merger Agreement, (iv) by operation of law or the terms of the N&B Labor Agreement, without the taking of any action by DuPont or any of its affiliates, automatically transferred to the N&B Group on or before the Distribution Date or (v) mutually identified by N&B, DuPont and IFF, in each case, exclusive of Non-Consenting Employees or any individual, as determined and agreed upon by DuPont and IFF in

 

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Abbreviation/Term

  

Description

   good faith, was inappropriately identified for employment with a member of the N&B Group

N&B Group

   N&B, and each person that is a direct or indirect affiliate of N&B immediately following the Distribution, and each person that becomes a subsidiary of N&B after the Distribution

N&B Indemnitees

   N&B, each other member of the N&B Group, and each of their affiliates from and after the Distribution, including IFF and each of IFF’s affiliates, and all persons who are or have been directors, officers, employees and of any member of the N&B Group (in each case, in their respective capacities as such), and their respective heirs, executors, successors and assigns

N&B Key Executive Role

   The position of a principal executive officer of N&B or his or her direct reports

N&B Liabilities

   The liabilities allocated to N&B and the members of the N&B Group described in the section of this document entitled “The Separation Agreement—The Separation—Assumption of Liabilities”

New York City time

   Local time in the City of New York, New York

Non-Consenting Employees

   Each individual who otherwise would be an N&B Employee pursuant to Section 1.01(a) of the Employee Matters Agreement, who has the right under applicable law or applicable N&B Labor Agreement to object to, opt out of, refuse to consent to, or otherwise fail to acquiesce to, and who has (a) validly objected to, opted out of, refused to consent to, or otherwise failed to acquiesce to, the automatic transfer of their employment to N&B Group by operation of applicable law, in cases where such employee is subject to automatic transfer by operation of applicable law, (b) validly refused to consent to, refused to accept the offer to, refused to execute a tripartite agreement or otherwise failed to acquiesce to, become an employee of N&B Group, or (c) validly objected to, opted out of, refused to consent to, or otherwise failed to acquiesce to, changes in his or her compensation or employee benefits by validly resigning or terminating his or her employment with, validly withdrawing his or her consent to employment with or validly rejecting his or her transfer to, N&B Group, in accordance with and to the extent permitted by applicable law or an applicable N&B Labor Agreement

NYSE

   The New York Stock Exchange

Parent Contribution

   The conveyance by DuPont to N&B of certain assets and liabilities constituting the N&B Business

 

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Abbreviation/Term

  

Description

record date

   The record date to be established for any pro rata distribution of shares

SEC

   The United States Securities and Exchange Commission

Securities Act

   The Securities Act of 1933, as amended

Separation

   The transfer of the N&B Assets that are not already owned by members of the N&B Group to members of the N&B Group and the assumption of the N&B Liabilities that are not already directly owed by or otherwise directly the responsibility of members of the N&B Group by members of the N&B Group, and the transfer of Excluded Assets that are not already directly owned by members of the DuPont Group to members of the DuPont Group and the Assumption of the Excluded Liabilities that are not already directly owed by or otherwise the responsibility of members of the DuPont Group by the DuPont Group, including the steps contemplated by the Internal Reorganization

Separation Agreement

   The Separation and Distribution Agreement, dated as of December 15, 2019, by and among DuPont, IFF and N&B (as it may be amended from time to time)

Separation Date

   The effective date of the Separation

Separation Plan

   DuPont’s plan with respect to the Internal Reorganization, as further described in the Separation Agreement

Share Issuance

   The issuance of shares of IFF common stock to the stockholders of N&B in the Merger

Special Cash Payment

   A special cash payment from N&B to DuPont in an amount equal to $7.306 billion, subject to certain adjustments as described in “The Separation Agreement—The Separation—Special Cash Payment and Post-Closing Adjustments”

Spin-Off

   If the Exchange Offer is terminated by DuPont without the exchange of shares (but the conditions to consummation of the Transactions have otherwise been satisfied), the distribution of all shares of N&B common stock on a pro rata basis to holders of DuPont common stock, with a record date to be announced by DuPont

Tax Matters Agreement

   The Tax Matters Agreement substantially in the form attached to the registration statement of which this prospectus forms a part and to be entered into immediately prior to the Distribution

Termination Fee

   The termination fee of $521.5 million payable by IFF to DuPont upon termination of the Merger Agreement under circumstances as described in the section of this document entitled “The Merger Agreement—

 

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Abbreviation/Term

  

Description

   Termination Fees and Expenses Payable in Certain Circumstances”

Transaction Documents

   The Merger Agreement, the Separation Agreement and the Ancillary Agreements

Transactions

   The transactions contemplated by the Transaction Documents, which provide for, among other things, the Separation, the Distribution and the Merger, as described in “The Transactions”

Transition Services Agreements

   The Transition Services Agreement (DuPont (or certain of its affiliates) to N&B (or certain of its affiliates)) and the Transition Services Agreement (N&B (or certain of its affiliates) to DuPont (or certain of its affiliates)), each as contemplated by the Merger Agreement

Valuation Dates

   The last three full trading days ending on and including the second trading day preceding the expiration date of the Exchange Offer period, as it may be voluntarily extended

Voting Agreement

   The Voting Agreement, dated as of December 15, 2019, by and between DuPont and Winder Investment Pte. Ltd.

VWAP

   Volume-weighted average price

 

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QUESTIONS AND ANSWERS ABOUT THE EXCHANGE OFFER AND THE TRANSACTIONS

The following are some of the questions that DuPont stockholders may have, and answers to those questions. These questions and answers, as well as the following summary, are not meant to be a substitute for the information contained in the remainder of this prospectus, and this information is qualified in its entirety by the more detailed descriptions and explanations contained elsewhere in this prospectus. You are urged to read this prospectus in its entirety prior to making any decision.

Questions and Answers about the Exchange Offer

 

Q:

Who may participate in the Exchange Offer?

 

A:

Any U.S. holders of DuPont common stock in the United States during the Exchange Offer period may participate in the Exchange Offer. Although DuPont has mailed this document to its stockholders to the extent required by U.S. law, including stockholders located outside the United States, this document is not an offer to buy, sell or exchange and it is not a solicitation of an offer to buy, sell or exchange any shares of DuPont common stock, shares of IFF common stock or shares of N&B common stock in any jurisdiction in which such offer, sale or exchange is not permitted.

Countries outside the United States generally have their own legal requirements that govern securities offerings made to persons resident in those countries and often impose stringent requirements about the form and content of offers made to the general public. None of DuPont, N&B or IFF has taken any action under non-U.S. laws or regulations to facilitate a public offer to exchange shares of DuPont common stock, shares of N&B common stock or shares of IFF common stock outside the United States. Accordingly, the ability of any non-U.S. person and any U.S. person residing outside of the United States to tender shares of DuPont common stock in the Exchange Offer will depend on whether there is an exemption available under the laws of such person’s home country that would permit such person to participate in the Exchange Offer without the need for DuPont, N&B or IFF to take any action to facilitate a public offering in that country or otherwise. For example, some countries exempt transactions from the rules governing public offerings if they involve persons who meet certain eligibility requirements relating to their status as sophisticated or professional investors.

Non-U.S. stockholders and U.S. stockholders residing outside of the United States should consult their advisors in considering whether they may participate in the Exchange Offer in accordance with the laws of their home countries or countries of residence, as applicable, and, if they do participate, whether there are any restrictions or limitations on transactions in the shares of DuPont common stock, N&B common stock or IFF common stock that may apply in such countries. None of DuPont, IFF or N&B can provide any assurance about whether such limitations may exist. See “The Exchange Offer—Certain Matters Relating to Non-U.S. Jurisdictions” for additional information about limitations on the Exchange Offer outside the United States.

 

Q:

How many shares of N&B common stock will I receive for each share of DuPont common stock that I tender?

 

A:

The Exchange Offer is designed to permit you to exchange your shares of DuPont common stock for shares of N&B common stock at a price per share equal to a 7% discount to the per-share value of IFF common stock, calculated as set forth in this prospectus. Stated another way, for each $100 of your DuPont common stock accepted in the Exchange Offer, you will receive approximately $107.53 of N&B common stock. The value of the DuPont common stock will be based on the calculated per-share value for the DuPont common stock on the NYSE and the value of the N&B common stock will be based on the calculated per-share value for IFF common stock on the NYSE, in each case determined by reference to the simple arithmetic average of the daily VWAP of DuPont common stock and IFF common stock on the NYSE on each of the Valuation Dates. The last day on which tenders will be accepted, whether on January 29, 2021 or any later date to

 

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  which the Exchange Offer is extended, is referred to in this document as the “expiration date.” Please note, however, that:

 

   

The number of shares you can receive is subject to an upper limit of 0.7180 shares of N&B common stock for each share of DuPont common stock accepted in the Exchange Offer. The next question and answer below describes how this limit may impact the value you receive.

 

   

The Exchange Offer does not provide for a minimum exchange ratio. See “The Exchange Offer—Terms of the Exchange Offer.”

 

   

If the number of shares of DuPont common stock that have been tendered and accepted results in fewer than all shares of N&B common stock being exchanged in the Exchange Offer, then such remaining shares of N&B common stock will be distributed pro rata to DuPont stockholders in the Clean-Up Spin-Off. DuPont currently expects that a portion of the shares of N&B common stock will be distributed to DuPont stockholders in the Clean-Up Spin-Off.

 

   

Because the Exchange Offer is subject to proration in the event of oversubscription, DuPont may accept for exchange only a portion of the DuPont common stock tendered by you. Any proration of the number of shares accepted in the Exchange Offer will be determined on the basis of the proration mechanics described under “The Exchange Offer—Terms of the Exchange Offer—Proration; Tenders for Exchange by Holders of Fewer than 100 Shares of DuPont Common Stock.” While proration is possible, DuPont does not expect proration to occur because DuPont currently expects that the number of shares of DuPont common stock tendered in the Exchange Offer will result in fewer than all of the shares of N&B common stock being subscribed for, and that shares of N&B common stock will remain to be distributed following the completion of the Exchange Offer.

For more information on the terms of the Exchanger Offer see “The Exchange Offer—Terms of the Exchange Offer.”

 

Q:

Is there a limit on the number of shares of N&B common stock I can receive for each share of DuPont common stock that I tender?

 

A:

The number of shares you can receive is subject to an upper limit of 0.7180 shares of N&B common stock for each share of DuPont common stock accepted in the Exchange Offer. If the upper limit is in effect, you will receive less than $107.53 of N&B common stock for each $100 of DuPont common stock that you tender, and you could receive much less. For example, if the calculated per-share value of DuPont common stock was $71.33 (the highest closing price for DuPont common stock on the NYSE during the three-month period prior to commencement of the Exchange Offer) and the calculated per-share value of N&B common stock was $101.44 (the lowest closing price for IFF common stock on the NYSE during that three-month period), the value of N&B common stock, based on the IFF common stock price, received for shares of DuPont common stock accepted for exchange would be approximately $102.11 for each $100 of DuPont common stock accepted for exchange.

The upper limit would represent a 12% discount for shares of N&B common stock based on the closing price of DuPont common stock on the NYSE and IFF common stock on the NYSE on the trading day immediately preceding the commencement of the Exchange Offer. DuPont set this upper limit to ensure that an unusual or unexpected drop in the trading price of IFF common stock, relative to the trading price of DuPont common stock, would not result in an unduly high number of shares of N&B common stock being exchanged for shares of DuPont common stock accepted in the Exchange Offer.

In addition, depending on the number of the shares of DuPont common stock validly tendered in the Exchange Offer and the final exchange ratio, the Exchange Offer could become oversubscribed. In the event of such an oversubscription, DuPont would have to limit the number of shares of DuPont common stock that it accepts in the Exchange Offer through a proration process. Any proration of the number of shares accepted in the Exchange Offer will be determined on the basis of the proration mechanics described under

 

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“The Exchange Offer—Terms of the Exchange Offer—Proration; Tenders for Exchange by Holders of Fewer than 100 Shares of DuPont Common Stock.” While proration is possible, DuPont does not expect proration to occur because DuPont currently expects that the number of shares of DuPont common stock tendered in the Exchange Offer will result in fewer than all of the shares of N&B common stock being subscribed for, and that shares of N&B common stock will remain to be distributed following the completion of the Exchange Offer.

 

Q:

Are there possible adverse effects on the value of IFF common stock ultimately to be received by DuPont stockholders who participate in the Exchange Offer?

 

A:

The factors associated with the Transactions are described in more detail in the section of this document entitled “Risk Factors.” You should carefully consider the risk factors set forth in that section.

 

Q:

How and when will I know the final exchange ratio and whether the upper limit is in effect?

 

A:

DuPont will announce the final exchange ratio used to determine the number of shares that can be received for each share of DuPont common stock accepted in the Exchange Offer by press release, and it will be available on the website www.dupontexchangeoffer.com, in each case by 11:59 p.m., New York City time, at the end of the second trading day (currently expected to be January 27, 2021) immediately preceding the expiration date of the Exchange Offer (currently expected to be January 29, 2021), unless the Exchange Offer is extended or terminated. At such time, the final exchange ratio will also be available from the information agent at the toll-free number provided on the back cover of this document. DuPont will also announce at that time whether the upper limit on the number of shares that can be received for each share of DuPont common stock tendered will be in effect. Therefore, the timing of such announcement will provide each holder of DuPont common stock with two full business days after knowing the final exchange ratio and whether the upper limit is in effect during which to decide whether to tender or withdraw their shares in the Exchange Offer.

 

Q:

How are the calculated per-share values of DuPont common stock and IFF common stock determined for purposes of calculating the number of shares of N&B common stock to be received in the Exchange Offer?

 

A:

The calculated per-share value of DuPont common stock and IFF common stock for purposes of the Exchange Offer will equal the simple arithmetic average of the daily VWAP of DuPont common stock and IFF common stock, as the case may be, on the NYSE on each of the Valuation Dates. The daily VWAP will be as reported by Bloomberg L.P. as displayed under the heading Bloomberg VWAP on the Bloomberg pages “DD UN<Equity>AQR” with respect to DuPont common stock and “IFF UN<Equity>AQR” with respect to N&B common stock (or any other recognized quotation source selected by DuPont in its sole discretion if such pages are not available or are manifestly erroneous). The daily VWAPs of DuPont common stock and IFF common stock obtained from Bloomberg L.P. may be different from other sources of volume-weighted average prices or investors’ or other security holders’ own calculations. DuPont will determine the simple arithmetic average of the VWAPs of each stock based on prices provided by Bloomberg L.P., and such determination will be final. For more information on the terms of the Exchange Offer, see “The Exchange Offer—Terms of the Exchange Offer.”

 

Q:

What is the “daily volume-weighted average price” or “daily VWAP?”

 

A:

The “daily volume-weighted average price” for DuPont common stock and IFF common stock will be the volume-weighted average price of DuPont common stock and IFF common stock on the NYSE during the period beginning at 9:30 a.m., New York City time (or such other time as is the official open of trading on the NYSE), and ending at 4:00 p.m., New York City time (or such other time as is the official close of

 

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  trading on the NYSE) except that such data will only take into account adjustments made to reported trades included by 4:10 p.m., New York City time, as reported to DuPont by Bloomberg L.P. for the equity ticker pages of DuPont, in the case of DuPont common stock, and IFF, in the case of IFF common stock. The daily VWAPs obtained from Bloomberg L.P. may be different from other sources of volume-weighted average prices or investors’ or other security holders’ own calculations. DuPont will determine the simple arithmetic average of the VWAPs of each stock based on prices provided by Bloomberg L.P., and such determination will be final.

 

Q:

Where can I find the daily VWAP of DuPont common stock and IFF common stock during the Exchange Offer period?

 

A:

DuPont will maintain a website at www.dupontexchangeoffer.com that provides the daily VWAP of both DuPont common stock and IFF common stock, together with indicative exchange ratios, which will be made available commencing at the end of the third trading day of the Exchange Offer and until the first Valuation Date. On the first two Valuation Dates, when the values of DuPont common stock and IFF common stock are calculated for the purposes of the Exchange Offer, the website will show the indicative exchange ratios based on indicative calculated per-share values calculated by DuPont, which will equal: (i) on the first Valuation Date, the daily VWAP of DuPont common stock and the IFF common stock for that day; and (ii) on the second Valuation Date, the simple arithmetic average of the daily VWAPs of DuPont common stock and IFF common stock for the first and second Valuation Dates. The website will not provide an indicative exchange ratio on the third Valuation Date. The final exchange ratio (as well as whether the upper limit on the number of shares that can be received for each share of DuPont common stock tendered will be in effect) will be announced by press release and be available on the website, in each case by 11:59 p.m., New York City time, at the end of the second trading day (currently expected to be January 27, 2021) immediately preceding the expiration date of the Exchange Offer (currently expected to be January 29, 2021). DuPont will determine the simple arithmetic average of the VWAPs based on data provided by Bloomberg L.P., and such determinations will be final.

 

Q:

Why is the calculated per-share value for N&B common stock based on the trading prices for IFF common stock?

 

A:

There is currently no trading market for N&B common stock. DuPont believes, however, that the trading prices for IFF common stock are an appropriate proxy for the trading prices of N&B common stock because (i) in the Merger, each outstanding share of N&B common stock (except for shares of N&B common stock held by N&B as treasury stock or by DuPont, which will be canceled and cease to exist and no consideration will be delivered in exchange therefor) will be automatically converted into the right to receive a number of shares of IFF common stock such that immediately after the Merger such DuPont stockholders will collectively own approximately 55.4% of IFF common stock on a fully diluted basis, and IFF shareholders will collectively own approximately 44.6% of IFF common stock on a fully diluted basis, in each case excluding any overlaps in the pre-transaction stockholder bases (calculated as further described in “The Merger Agreement—Merger Consideration”), (ii) prior to the consummation of the Exchange Offer, N&B will issue to DuPont a number of shares of N&B common stock such that the number of shares of N&B common stock issued and outstanding at the time of the Distribution is equal to the number of shares to be issued in the Share Issuance and the exchange ratio in the Merger is equal to approximately one and, as a result, each share of N&B common stock (except for shares of N&B common stock held by N&B as treasury stock or by DuPont, which will be canceled and cease to exist and no consideration will be delivered in exchange therefor) will be converted into approximately one share of IFF common stock in the Merger, and (iii) at the Valuation Dates, it is expected that all the major conditions to the consummation of the Merger will have been satisfied or, if permitted by the Merger Agreement, waived (except for those conditions that by their nature are satisfied at the closing of the Merger), and the Merger will be expected to be consummated shortly, such that investors should be expected to be valuing IFF common stock based on the expected value of such IFF common stock immediately after the Merger. There can be no assurance,

 

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  however, that IFF common stock after the Merger will trade on the same basis as IFF common stock trades prior to the Merger. See “Risk Factors—Risks Related to the Exchange Offer—The trading prices of IFF common stock may not be an appropriate proxy for the prices of N&B common stock.”

 

Q:

How and when will I know the final exchange ratio?

 

A:

DuPont will announce the final exchange ratio used to determine the number of shares that can be received for each share of DuPont common stock accepted in the Exchange Offer by press release, and it will be available on the website www.dupontexchangeoffer.com, in each case by 11:59 p.m., New York City time, at the end of the second trading day (currently expected to be January 27, 2021) immediately preceding the expiration date of the Exchange Offer (currently expected to be January 29, 2021), unless the Exchange Offer is extended or terminated. At such time, the final exchange ratio will also be available from the information agent at the toll-free number provided on the back cover of this document. DuPont will also announce at that time whether the upper limit on the number of shares that can be received for each share of DuPont common stock tendered will be in effect. Therefore, the timing of such announcement will provide each holder of DuPont common stock with two full business days after knowing the final exchange ratio and whether the upper limit is in effect during which to decide whether to tender or withdraw their shares in the Exchange Offer.

 

Q:

Will indicative exchange ratios be provided during the Exchange Offer period?

 

A:

Yes. Prior to the Valuation Dates and commencing at the end of the third trading day of the Exchange Offer, indicative exchange ratios will be available by contacting the information agent at the toll-free number provided on the back cover of this prospectus and at www.dupontexchangeoffer.com, calculated as though that day were the last of the three Valuation Dates for the Exchange Offer. The indicative exchange ratio will also reflect whether the upper limit on the exchange ratio, described above, would have been in effect. In other words, assuming that a given day is a trading day, the indicative exchange ratio will be calculated based on the simple arithmetic average of the daily VWAPs of DuPont common stock and IFF common stock for that day and the two immediately preceding trading days. On the first two Valuation Dates, when the values of DuPont common stock and IFF common stock are calculated for the purposes of the Exchange Offer, the website will show the indicative exchange ratios based on indicative calculated per-share values calculated by DuPont, which will equal: (i) on the first Valuation Date, the daily VWAP of DuPont common stock and the IFF common stock for that day; and (ii) on the second Valuation Date, the simple arithmetic mean of the daily VWAPs of DuPont common stock and IFF common stock for the first and second Valuation Dates. The website will not provide an indicative exchange ratio on the third Valuation Date. The final exchange ratio (as well as whether the upper limit on the number of shares that can be received for each share of DuPont common stock tendered will be in effect) will be announced by press release and be available on the website, in each case by 11:59 p.m., New York City time, at the end of the second trading day (currently expected to be January 27, 2021) immediately preceding the expiration date of the Exchange Offer (currently expected to be January 29, 2021).

In addition, for purposes of illustration, a table that indicates the number of shares of N&B common stock that you would receive per share of DuPont common stock, calculated on the basis described above and taking into account the upper limit, assuming a range of averages of the daily VWAP of DuPont common stock and IFF common stock on the Valuation Dates, is provided under “The Exchange Offer—Terms of the Exchange Offer.”

 

Q:

What if DuPont common stock or IFF common stock does not trade on any of the Valuation Dates?

 

A:

If a market disruption event, as defined on page 120 hereof, occurs with respect to DuPont common stock or IFF common stock on any of the Valuation Dates, the calculated per-share value of DuPont common stock and per-share value of N&B common stock will be determined using the daily VWAP of shares of DuPont

 

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  common stock and shares of IFF common stock on the preceding full trading day or days, as the case may be, on which no market disruption event occurred with respect to either DuPont common stock and IFF common stock. If, however, a market disruption event occurs as specified above, DuPont may terminate or extend the Exchange Offer if, in its reasonable judgment, the market disruption event has impaired the benefits of the Exchange Offer to DuPont. If DuPont decides to extend the Exchange Offer period following a market disruption event, the Valuation Dates will be reset, as with any extension of the Exchange Offer, to the period of three consecutive trading days ending on and including the second trading day preceding the expiration date, as may be extended. Therefore, the timing of such announcement will provide each holder of DuPont common stock with two full business days after knowing the final exchange ratio and whether the upper limit is in effect during which to decide whether to tender or withdraw their shares in the Exchange Offer. For specific information as to what would constitute a market disruption event, see “The Exchange Offer—Conditions to Consummation of the Exchange Offer.”

 

Q:

Are there circumstances under which I would receive fewer shares of N&B common stock than I would have received if the exchange ratio were determined using the closing prices of DuPont common stock and IFF common stock on the expiration date of the Exchange Offer?

 

A:

Yes. The exchange ratio is calculated based on an average of the daily VWAP of shares of DuPont common stock and shares of IFF common stock on the Valuation Dates and not using the closing prices of DuPont common stock and IFF common stock on the expiration date of the Exchange Offer, such that you could receive fewer shares of N&B common stock than you would have received if the exchange ratio were determined using the closing prices of DuPont common stock and IFF common stock on the expiration date of the Exchange Offer. For example, if the trading price of DuPont common stock were to increase during the last two full trading days of the Exchange Offer, the average DuPont stock price used to calculate the exchange ratio would likely be lower than the closing price of shares of DuPont common stock on the expiration date of the Exchange Offer. As a result, you would receive fewer shares of N&B common stock, and therefore effectively fewer shares of IFF common stock, for each $100 of shares of DuPont common stock than you would have if the DuPont stock price were calculated on the basis of the closing price of shares of DuPont common stock on the expiration date of the Exchange Offer or on the basis of an averaging period that includes the last two full trading days prior to the expiration of the Exchange Offer period. Similarly, if the trading price of IFF common stock were to decrease during the last two full trading days prior to the expiration of the Exchange Offer period, the average IFF stock price used to calculate the exchange ratio would likely be higher than the closing price of IFF common stock on the last full trading day prior to the expiration date. This could also result in your receiving fewer shares of N&B common stock, and therefore effectively fewer shares of IFF common stock, for each $100 of DuPont common stock than you would otherwise receive if the IFF common stock price were calculated on the basis of the closing price of IFF common stock on the last full trading day prior to the expiration date or on the basis of an averaging period that included the last two full trading days prior to the expiration of the Exchange Offer period. See “The Exchange Offer—Terms of the Exchange Offer.”

 

Q:

Will fractional shares of IFF common stock be distributed?

 

A:

No fractional shares will be issued in the Merger, as described in this document. The Exchange Offer Agent will hold shares of N&B common stock in trust for the holders of DuPont common stock who validly tendered their shares in the Exchange Offer or are entitled to receive shares in the Clean-Up Spin-Off. Immediately following the consummation of the Exchange Offer and the expected Clean-Up Spin-Off, and by means of the Merger, each outstanding share of N&B common stock will be converted into the right to receive an equal number of shares of IFF common stock (because, prior to the consummation of the Exchange Offer, N&B will issue to DuPont a number of shares of N&B common stock such that the number of shares of N&B common stock issued and outstanding at the time of the Distribution is equal to the number of shares to be issued in the Share Issuance and the exchange ratio in the Merger is equal to approximately one). In the Merger, no fractional shares of IFF common stock will be delivered to holders of

 

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  N&B common stock. All fractional shares of IFF common stock that a holder of shares of N&B common stock would otherwise be entitled to receive as a result of the Merger will be aggregated by the Exchange Agent. The Exchange Agent will cause the whole shares obtained thereby to be sold on behalf of such holders of shares of N&B common stock that would otherwise be entitled to receive such fractional shares of IFF common stock pursuant to the Merger, in the open market. The Exchange Agent will make available the net proceeds thereof, after deducting any required withholding taxes and brokerage charges, commissions and conveyance and similar taxes, on a pro rata basis, without interest, as soon as practicable to the holders of N&B common stock that would otherwise be entitled to receive such fractional shares of IFF common stock in the Merger. See “The Exchange Offer—Terms of the Exchange Offer.”

 

Q:

What is the aggregate number of shares of N&B common stock being offered in the Exchange Offer?

 

A:

In the Exchange Offer, DuPont is offering to exchange all of the shares of N&B common stock held by it. In addition, N&B will issue to DuPont a number of shares of N&B common stock such that the number of shares of N&B common stock issued and outstanding at the time of the Distribution is equal to the number of shares to be issued in the Share Issuance and the exchange ratio in the Merger is equal to approximately one. DuPont currently expects that approximately 142 million shares of N&B common stock will be available in the Exchange Offer. See “The Exchange Offer—Terms of the Exchange Offer.”

 

Q:

What happens if not enough shares of DuPont common stock are tendered to allow DuPont to exchange all of the shares of N&B common stock DuPont holds?

 

A:

If the Exchange Offer is consummated but less than all of the shares of N&B common stock being offered in the Exchange Offer are exchanged because the Exchange Offer is not fully subscribed, the additional shares of N&B common stock owned by DuPont will be distributed on a pro rata basis in the Clean-Up Spin-Off to the holders of shares of DuPont common stock on the record date, other than in respect of any shares of DuPont common stock tendered and accepted in the Exchange Offer. Any DuPont stockholder who validly tenders (and does not properly withdraw) shares of DuPont common stock for shares of N&B common stock and whose shares are accepted in the Exchange Offer will waive their rights with respect to such shares to receive, and forfeit any rights to, shares of N&B common stock distributed on a pro rata basis to DuPont stockholders in the Clean-Up Spin-Off. See “The Exchange Offer—Distribution of N&B Common Stock Remaining After the Exchange Offer.”

 

Q:

What happens if DuPont declares a quarterly dividend during the Exchange Offer?

 

A:

If DuPont declares a quarterly dividend and the record date for that dividend occurs during the Exchange Offer period, you will be eligible to receive that dividend if you continue to own your shares of DuPont common stock as of that record date.

 

Q:

Will tendering my shares affect my ability to receive the DuPont quarterly dividend?

 

A:

No. If a dividend is declared by DuPont with a record date before the completion of the Exchange Offer, you will be entitled to that dividend even if you tendered your shares of DuPont common stock. Tendering your shares of DuPont common stock in the Exchange Offer is not a sale or transfer of those shares until they are accepted for exchange upon completion of the Exchange Offer.

 

Q:

Will all shares of DuPont common stock that I tender be accepted in the Exchange Offer?

 

A:

Not necessarily. Depending on the number of shares of DuPont common stock validly tendered in the Exchange Offer and not properly withdrawn, the calculated per-share value of DuPont common stock and the per-share value of N&B common stock determined as described above, DuPont may have to limit the number of shares of DuPont common stock that it accepts in the Exchange Offer through a proration

 

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  process. Any proration of the number of shares accepted in the Exchange Offer will be determined on the basis of the proration mechanics described under “The Exchange Offer—Terms of the Exchange Offer—Proration; Tenders for Exchange by Holders of Fewer than 100 Shares of DuPont Common Stock.”

An exception to proration can apply to stockholders (other than participants in the DuPont Retirement Savings Plan (referred to herein as the “DuPont RSP”)) who beneficially own “odd-lots,” that is, fewer than 100 shares of DuPont common stock. Such beneficial holders of DuPont common stock who validly tender all of their shares will not be subject to proration. For instance, if you directly or beneficially own 50 shares of DuPont common stock and tender all 50 shares, your odd-lot will not be subject to proration. If, however, you hold less than 100 shares of DuPont common stock, but do not tender all of your shares, you will be subject to proration to the same extent as holders of more than 100 shares if the Exchange Offer is oversubscribed. Direct or beneficial holders of 100 or more shares of DuPont common stock will be subject to proration.

Proration for each tendering stockholder subject to proration will be based on (i) the proportion that the total number of shares of DuPont common stock to be accepted, except for tenders of odd-lots, as described above, bears to the total number of shares of DuPont common stock validly tendered and not properly withdrawn, except for tenders of odd-lots, as described above, and (ii) the number of shares of DuPont common stock validly tendered and not properly withdrawn by that stockholder (and not on that stockholder’s aggregate ownership of shares of DuPont common stock). Any shares of DuPont common stock not accepted for exchange as a result of proration will be returned to tendering stockholders promptly after the final proration factor is determined.

DuPont will announce its final determination of the extent to which tenders will be prorated by press release promptly after this determination is made.

While proration is possible, DuPont does not expect proration to occur because DuPont currently expects that the number of shares of DuPont common stock tendered in the Exchange Offer will result in fewer than all of the shares of N&B common stock being subscribed for, and that shares of N&B common stock will remain to be distributed following the completion of the Exchange Offer.

 

Q:

Will I be able to sell my shares of N&B common stock after the Exchange Offer is completed?

 

A:

No. There currently is no trading market for N&B common stock and no such trading market will be established in the future. The Exchange Offer Agent will hold all issued and outstanding shares of N&B common stock in trust until the shares of N&B common stock are converted into the right to receive shares of IFF common stock in the Merger. Participants in the Exchange Offer will not receive such shares of N&B common stock, but will receive the shares of IFF common stock issuable in the Merger, which can be sold in accordance with applicable securities laws. See “The Exchange Offer—Distribution of N&B Common Stock Remaining After the Exchange Offer.”

 

Q:

How many shares of DuPont common stock will DuPont accept if the Exchange Offer is completed?

 

A:

The number of shares of DuPont common stock that will be accepted for exchange in the Exchange Offer if the Exchange Offer is completed will depend on the final exchange ratio, the number of shares of N&B common stock offered (which will be based upon the number of shares issued in the Share Issuance) and the number of shares of DuPont common stock tendered. DuPont currently expects that approximately 142 million shares of N&B common stock will be available in the Exchange Offer (based on an equal number being issued by IFF in the Share Issuance). Assuming that DuPont offers approximately 142 million shares of N&B common stock and that the Exchange Offer is fully subscribed, the largest possible number of shares of DuPont common stock that will be accepted for exchange in the Exchange Offer would be approximately 142 million divided by the final exchange ratio. For example, assuming that the final exchange ratio is 0.6762 (the current indicative exchange ratio based on the daily VWAPs of DuPont common stock and IFF common stock on December 28, 2020, December 29, 2020, and December 30, 2020 and assuming approximately 142 million shares of N&B common stock are offered in the Exchange Offer), then DuPont would accept for exchange up to a total of approximately 210 million shares of DuPont common stock.

 

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The calculation above is illustrative only, and DuPont does not expect 210 million shares of DuPont common stock to be accepted in the Exchange Offer because DuPont does not expect, due to the number of shares of N&B common stock being offered, to receive a sufficient number of tendered shares of DuPont common stock to make the Exchange Offer fully subscribed.

 

Q:

Are there any conditions to DuPont’s obligation to complete the Exchange Offer?

 

A:

Yes. The Exchange Offer is subject to various conditions listed under “The Exchange Offer—Conditions to Consummation of the Exchange Offer.” If any of these conditions are not satisfied or waived prior to the expiration of the Exchange Offer, DuPont will not be required to accept shares for exchange and may extend or terminate the Exchange Offer.

DuPont may waive any of the conditions to the Exchange Offer prior to the expiration of the Exchange Offer. For a description of the material conditions precedent to the Exchange Offer, including satisfaction or waiver of the conditions to the Transactions, the receipt of IFF shareholder approval of the issuance of shares of IFF common stock in connection with the Merger, and other conditions, see “The Exchange Offer—Conditions to Consummation of the Exchange Offer.” N&B has no right to waive any of the conditions to the Exchange Offer. IFF has no right to waive any of the conditions to the Exchange Offer (other than certain conditions relating to the other transactions).

 

Q:

When does the Exchange Offer expire?

 

A:

The period during which you are permitted to tender your shares of DuPont common stock in the Exchange Offer will expire at one minute after 11:59 p.m., New York City time, on January 29, 2021, unless DuPont extends the Exchange Offer (subject to certain limitations on DuPont’s ability to extend). See “The Exchange Offer—Terms of the Exchange Offer—Extension; Termination; Amendment.”

 

Q:

Can the Exchange Offer be extended and under what circumstances?

 

A:

Yes. DuPont can, subject to the terms and conditions of the Separation Agreement, extend the Exchange Offer, in its sole discretion, at any time and from time to time. For instance, the Exchange Offer may be extended if any of the conditions for consummation of the Exchange Offer listed under “The Exchange Offer—Conditions to Consummation of the Exchange Offer” are not satisfied or waived prior to the expiration of the Exchange Offer. In case of an extension of the Exchange Offer, DuPont will publicly announce the extension at www.dupontexchangeoffer.com and separately by press release no later than 9:00 a.m., New York City time, on the next business day following the previously scheduled expiration date. If the Exchange Offer is extended, the Valuation Dates will reset to the period of three consecutive trading days ending on and including the second trading day preceding the revised expiration date, as may be extended.

DuPont’s right to extend the Exchange Offer is subject to the terms and conditions of the Separation Agreement. The Separation Agreement provides that the terms and conditions of the Exchange Offer must comply with the terms of the Merger Agreement and all applicable securities law requirements. See “The Separation Agreement—The Distribution.” The Separation Agreement also provides that, unless otherwise required by applicable law, the maximum number of days that the Exchange Offer may be extended following satisfaction of the conditions to the closing set forth in Article IX of the Merger Agreement (other than consummation of the transactions contemplated by the Separation Agreement and satisfaction of those conditions to be satisfied as of the closing date, provided that such conditions are capable of being satisfied at such date) shall be the earlier of (i) twenty business days and (ii) the latest date that would permit the distribution to occur prior to the initial outside date (as defined in the Merger Agreement) in compliance with all applicable laws.

 

Q:

How do I participate in the Exchange Offer?

 

A:

The procedures you must follow to participate in the Exchange Offer will depend on whether you hold your shares of DuPont common stock through a bank or trust company or broker, as a participant in the DuPont

 

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  RSP, or if your shares of DuPont common stock are registered in your name in DuPont’s direct register of shares (the “DRS”). For specific instructions about how to participate, see “The Exchange Offer—Terms of the Exchange Offer—Procedures for Tendering.”

 

Q:

What if I participate in the DuPont RSP?

 

A:

If you participate in the DuPont RSP, you can elect to either keep your shares of DuPont common stock or exchange some or all of your shares of DuPont common stock for shares of N&B common stock in the Exchange Offer (which will convert into the right to receive shares of IFF common stock in the Merger). You will receive instructions from Bank of America, N.A., the trustee of the DuPont RSP, via letter or email informing you how to make an election and the deadline for making an election. If you do not make an active election prior to the applicable deadline, none of the shares of DuPont common stock attributable to your account under the DuPont RSP will be exchanged for shares of N&B common stock in the Exchange Offer.

For specific instructions about how to tender the shares of DuPont common stock attributable to your account, see “The Exchange Offer—Terms of the Exchange Offer—Procedures for Tendering.”

If you do not elect to exchange some or all of the shares of DuPont common stock attributable to your account for shares of N&B common stock, you may still receive shares of N&B common stock in the Clean-Up Spin-Off in respect of the shares of DuPont common stock attributable to your account. DuPont is unable to predict how many shares of N&B common stock you would receive in the Clean-Up Spin-Off. Upon the closing of the Merger, any shares of N&B common stock attributable to your account will be converted into the right to receive shares of IFF common stock.

After the closing of the Merger, the plan fiduciary responsible for evaluating the propriety of investment options under the DuPont RSP may conclude that the DuPont RSP will no longer maintain an IFF common stock fund, in which case you may be required to sell the shares of IFF common stock attributable to your account and reallocate the sale proceeds to one or more of the other investment options within the DuPont RSP.

 

Q:

How do I tender my shares of DuPont common stock after the final exchange ratio has been determined?

 

A:

DuPont will announce the final exchange ratio used to determine the number of shares of N&B common stock that can be received for each share of DuPont common stock accepted in the Exchange Offer by press release and it will be available on the website www.dupontexchangeoffer.com, in each case by 11:59 p.m., New York City time, at the end of the second trading day (currently expected to be January 27, 2021) immediately preceding the expiration date of the Exchange Offer (currently expected to be January 29, 2021), unless the Exchange Offer is extended or terminated. The timing of such announcement will therefore provide each holder of DuPont common stock with two full business days after knowing the final exchange ratio during which to decide whether to tender or withdraw their shares in the Exchange Offer. If you wish to tender shares of DuPont common stock pursuant to the Exchange Offer but (i) the procedure for book-entry transfer cannot be completed on a timely basis or (ii) time will not permit all required documents to reach the Exchange Offer Agent on or before the expiration date of the Exchange Offer, you may still tender your shares of DuPont common stock by complying with the guaranteed delivery procedures described in the section entitled “The Exchange Offer—Terms of the Exchange Offer—Procedures for Tendering—Guaranteed Delivery Procedures.” If you hold shares of DuPont common stock through a broker, dealer, commercial bank, trust company or similar institution, that institution must tender your shares on your behalf.

If your shares of DuPont common stock are held through an institution and you wish to tender your DuPont common stock after The Depository Trust Company has closed, the institution must deliver a notice of guaranteed delivery to the Exchange Offer Agent via e-mail prior to one minute after 11:59 p.m., New York City time, on the expiration date.

 

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Q:

Can I tender only a portion of my shares of DuPont common stock in the Exchange Offer?

 

A:

Yes. You may tender all, some or none of your shares of DuPont common stock.

 

Q:

What do I do if I want to retain all of my shares of DuPont common stock?

 

A:

If you want to retain all of your shares of DuPont common stock, you do not need to take any action.

 

Q:

Can I change my mind after I tender my shares of DuPont common stock and before the Exchange Offer expires?

 

A:

Yes. You may withdraw your tendered shares at any time before the Exchange Offer expires. See “The Exchange Offer—Terms of the Exchange Offer—Withdrawal Rights.” If you change your mind again, you can re-tender your shares of DuPont common stock by following the tender procedures again prior to the expiration of the Exchange Offer.

If you hold your shares through the DuPont RSP, you may withdraw your tendered shares and, if you change your mind again, retender your shares. However, different deadlines for tendering and withdrawing apply to shares held in the DuPont RSP. If you participate in the DuPont RSP, you will receive instructions from Bank of America, N.A. via letter or email informing you how to make an election and the deadlines for making and withdrawing an election.

 

Q:

Will I be able to withdraw the shares of DuPont common stock I tender after the final exchange ratio has been determined?

 

A:

Yes. The final exchange ratio used to determine the number of shares of N&B common stock that you will receive for each share of DuPont common stock accepted in the Exchange Offer will be announced by press release and be available on the website www.dupontexchangeoffer.com, in each case by 11:59 p.m., New York City time, at the end of the second trading day (currently expected to be January 27, 2021) immediately preceding the expiration date of the Exchange Offer (currently expected to be January 29, 2021), unless the Exchange Offer is extended or terminated. DuPont will also announce at that time whether the upper limit on the number of shares of N&B common stock that can be received for each share of DuPont common stock tendered is in effect. The timing of such announcement will therefore provide each holder of DuPont common stock with two full business days after knowing the final exchange ratio and whether the upper limit is in effect during which to decide whether to tender or withdraw their shares in the Exchange Offer. Subject to any extension or termination, you have the right to withdraw shares of DuPont common stock you have tendered at any time prior to one minute after 11:59 p.m., New York City time, on the expiration date, which is January 29, 2021. In addition, shares of DuPont common stock tendered pursuant to the Exchange Offer may be withdrawn after March 1, 2021 (i.e., after the expiration of 40 business days from the commencement of the Exchange Offer), if DuPont does not accept your shares of DuPont common stock pursuant to the exchange offer by such date. See “The Exchange Offer—Terms of the Exchange Offer.”

 

Q:

How do I withdraw my tendered DuPont common stock after the final exchange ratio has been determined?

 

A:

If you are a registered stockholder of DuPont common stock holding shares through the DRS and you wish to withdraw your shares after the final exchange ratio has been determined, then you must deliver a written notice of withdrawal or an e-mail transmission notice of withdrawal to the Exchange Offer Agent prior to one minute after 11:59 p.m., New York City time, on the expiration date. In addition, shares of DuPont common stock tendered pursuant to the Exchange Offer may be withdrawn after March 1, 2021 (i.e., after the expiration of 40 business days from the commencement of the Exchange Offer), if DuPont does not accept your shares of DuPont common stock pursuant to the Exchange Offer by such date. The information that must be included in that notice is specified under “The Exchange Offer—Terms of the Exchange Offer—Withdrawal Rights.”

 

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If you hold your shares through a broker, dealer, commercial bank, trust company or similar institution, you should consult that institution on the procedures you must comply with and the time by which such procedures must be completed in order for that institution to provide a written notice of withdrawal or an e-mail transmission notice of withdrawal to the Exchange Offer Agent on your behalf prior to one minute after 11:59 p.m., New York City time, on the expiration date. In addition, shares of DuPont common stock tendered pursuant to the Exchange Offer may be withdrawn after March 1, 2021 (i.e., after the expiration of 40 business days from the commencement of the Exchange Offer), if DuPont does not accept your shares of DuPont common stock pursuant to the Exchange Offer by such date. If you hold your shares through such an institution, that institution must deliver the notice of withdrawal with respect to any shares you wish to withdraw. In such a case, as a beneficial owner and not a registered stockholder, you will not be able to provide a notice of withdrawal for such shares directly to the Exchange Offer Agent.

If your shares of DuPont common stock are held through an institution and you wish to withdraw your shares of DuPont common stock after The Depository Trust Company has closed, the institution must deliver a written notice of withdrawal or an e-mail transmission notice of withdrawal to the Exchange Offer Agent prior to one minute after 11:59 p.m., New York City time, on the expiration date, in the form of The Depository Trust Company’s notice of withdrawal and you must specify the name and number of the account at The Depository Trust Company to be credited with the withdrawn shares and must otherwise comply with The Depository Trust Company’s procedures. In addition, shares of DuPont common Stock tendered pursuant to the Exchange Offer may be withdrawn after March 1, 2021 (i.e., after the expiration of 40 business days from the commencement of the Exchange Offer), if DuPont does not accept your shares of DuPont common stock pursuant to the Exchange Offer by such date. See “The Exchange Offer—Terms of the Exchange Offer—Withdrawal Rights—Withdrawing Your Shares After the Final Exchange Ratio Has Been Determined.”

 

Q:

Are there any material differences between the rights of holders of DuPont common stock and IFF common stock?

 

A:

Yes. IFF is a New York corporation and DuPont is a Delaware corporation, and each is subject to different organizational documents. Holders of DuPont common stock, whose rights are currently governed by DuPont’s organizational documents and Delaware law, will, with respect to the shares validly tendered and exchanged immediately following the Exchange Offer (and with respect to those shares they receive in the expected Clean-Up Spin-Off, which are received by stockholders without the exchange of any of their shares in the Exchange Offer), become shareholders of IFF and their rights will be governed by IFF’s organizational documents and New York law. The material differences between the rights associated with DuPont common stock and IFF common stock that may affect holders of DuPont common stock whose shares are accepted for exchange for shares of N&B common stock in the Exchange Offer (or who receive shares of N&B common stock in the expected Clean-Up Spin-Off) and who will obtain shares of IFF common stock in the Merger, relate to, among other things, advance notice procedures for shareholder proposals or director nominations and whether certain actions and proceedings are subject to an exclusive forum. For a further discussion of the material differences between the rights of holders of DuPont common stock and IFF common stock, see the section entitled “Comparison of Rights of Holders of DuPont Common Stock and IFF Common Stock.”

 

Q:

Are there any appraisal rights for holders of shares of DuPont common stock?

 

A:

There are no appraisal rights available to holders of shares of DuPont common stock in connection with the Exchange Offer.

 

Q:

What will DuPont do with the shares of DuPont common stock that are tendered, and what is the impact of the Exchange Offer on DuPont’s share count?

 

A:

The shares of DuPont common stock that are tendered in the Exchange Offer will be held as treasury stock by DuPont unless and until retired or used for other purposes. Any shares of DuPont common stock

 

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  acquired by DuPont in the Exchange Offer will reduce the total number of shares of DuPont common stock outstanding, although DuPont’s actual number of shares outstanding on a given date reflects a variety of factors such as option exercises and release of shares upon vesting restricted stock units.

 

Q:

What will happen to the remaining shares of N&B common stock owned by DuPont in the expected Clean-Up Spin-Off following the consummation of the Exchange Offer?

 

A:

DuPont currently expects that the number of shares of DuPont common stock tendered in the Exchange Offer will result in fewer than all outstanding shares of N&B common stock being subscribed for in the Exchanged Offer (i.e., the Exchange Offer will be not be fully subscribed). DuPont therefore will distribute any remaining shares of N&B common stock on a pro rata basis in the Clean-Up Spin-Off to DuPont stockholders as of the record date, other than in respect of any shares of DuPont common stock tendered and accepted in the Exchange Offer. Any DuPont stockholder who validly tenders (and does not properly withdraw) shares of DuPont common stock for shares of N&B common stock and whose shares are accepted in the Exchange Offer will waive their rights with respect to such shares to receive, and forfeit any rights to, shares of N&B common stock distributed on a pro rata basis to DuPont stockholders in the Clean-Up Spin-Off. Upon the consummation of the Exchange Offer and the Clean-Up Spin-Off, prior to the effective time of the Merger, DuPont will deliver to the Exchange Offer Agent, and the Exchange Offer Agent will hold, for the account of the relevant DuPont stockholders, a book-entry authorization representing all of the outstanding shares of N&B common stock, pending the consummation of the Merger. Prior to or at the effective time of the Merger, IFF will deposit with the Exchange Agent evidence in book-entry form representing the shares of IFF common stock issuable in the Merger. Such shares of IFF common stock will be delivered promptly following the effectiveness of the Merger, pursuant to the procedures determined by the Exchange Offer Agent and the Exchange Agent. See “The Exchange Offer—Terms of the Exchange Offer—Exchange of Shares of DuPont Common Stock.” If the Exchange Offer is terminated by DuPont on or prior to the expiration date of the Exchange Offer without the exchange of shares, but the conditions to consummation of the Transactions have otherwise been satisfied, DuPont intends to distribute all shares of N&B common stock owned by DuPont on a pro rata basis to holders of DuPont common stock in the Spin-Off, with a record date to be announced by DuPont. Such distributed shares of N&B common stock will convert to the right to receive IFF common stock in the Merger.

 

Q:

If I tender some or all of my shares of DuPont common stock in the Exchange Offer, will I receive any shares of N&B common stock in the expected Clean-Up Spin-Off?

 

A:

DuPont stockholders who validly tender (and do not properly withdraw) shares of DuPont common stock for shares of N&B common stock and whose shares are accepted in the Exchange Offer will waive their rights (but solely with respect to such shares) to receive, and forfeit any rights to, shares of N&B common stock distributed on a pro rata basis to DuPont stockholders in the Clean-Up Spin-Off. However, in the event any tendered shares are not accepted in the Exchange Offer for any reason, or you do not tender all of your shares of DuPont common stock, such shares will be entitled to receive shares of N&B common stock in the Clean-Up Spin-Off.

 

Q:

If I do not tender any of my shares of DuPont common stock in the Exchange Offer, will I receive any shares of N&B common stock in the expected Clean-Up Spin-Off?

 

A:

Yes. DuPont currently expects that the number of shares of DuPont common stock tendered in the Exchange Offer will result in fewer than all outstanding shares of N&B common stock being subscribed for in the Exchanged Offer (i.e., the Exchange Offer will not be fully subscribed). DuPont therefore will distribute any remaining shares of N&B common stock on a pro rata basis to DuPont stockholders as of the record date, other than in respect of any shares of DuPont common stock tendered and accepted in the Exchange Offer. Any DuPont stockholder who validly tenders (and does not properly withdraw) shares of DuPont common stock for shares of N&B common stock and whose shares are accepted in the Exchange Offer will waive

 

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  their rights with respect to such shares to receive, and forfeit any rights to, shares of N&B common stock distributed on a pro rata basis to DuPont stockholders in the Clean-Up Spin-Off. DuPont is unable to predict the number shares of N&B common stock that will be distributed in the Clean-Up Spin-Off as this will depend on the number of shares of DuPont common stock tendered by DuPont stockholders in the Exchange Offer and the final exchange ratio. DuPont is therefore unable to predict, and cannot guarantee, how many shares of N&B common stock will be distributed in the Clean-Up Spin-Off and how many shares of N&B common stock would be received per share of DuPont common stock in the Clean-Up Spin-Off. Holders of DuPont common stock that do not tender any shares of DuPont common stock in the Exchange Offer will only receive such number of shares of N&B common stock (and, following the Merger, shares of IFF common stock in respect thereof) that are remaining after the completion of the Exchange Offer and distributed on a pro rata basis.

 

Q:

If I do not tender any of my shares of DuPont common stock in the Exchange Offer, but I want to receive shares of N&B common stock in the expected Clean-Up Spin-Off, am I required to do anything?

 

A:

No. DuPont stockholders are not required to take any action in connection with the Clean-Up Spin-Off or Merger, and no action by DuPont stockholders is required to participate in these transactions and to receive the shares of N&B common stock that will be distributed on a pro rata basis in the Clean-Up Spin-Off and automatically converted in the Merger into the right to receive shares of IFF common stock (calculated as further described in “The Merger Agreement—Merger Consideration”). DuPont is unable to predict the number of shares of N&B common stock that will be distributed in the Clean-Up Spin-Off as this will depend on the number of shares of DuPont common stock tendered by DuPont stockholders in the Exchange Offer and the final exchange ratio. DuPont is therefore unable to predict, and cannot guarantee, how many shares of N&B common stock will be distributed in the Clean-Up Spin-Off and how many shares of N&B common stock would be received per share of DuPont common stock in the Clean-Up Spin-Off. Holders of DuPont common stock that do not tender any shares of DuPont common stock in the Exchange Offer will only receive such number of shares of N&B common stock (and, following the Merger, IFF common stock) that are remaining after the completion of the Exchange Offer and distributed on a pro rata basis. While DuPont does not presently expect the Exchange Offer to be oversubscribed, if the Exchange Offer were oversubscribed you would not receive any shares of N&B common stock unless you participated in the Exchange Offer. Shares of N&B common stock will only be distributed in the Clean-Up Spin-Off if there are shares of N&B common stock remaining after the Exchange Offer. DuPont stockholders should carefully read this document, which contains important information about the Transactions, DuPont, IFF and N&B. In addition, should you want to participate in the Exchange Offer to exchange your shares of DuPont common stock for shares of N&B common stock, you would need to take the actions described above and in the section of this document entitled “The Exchange Offer.”

IF YOU DO NOT ELECT TO PARTICIPATE IN THE EXCHANGE OFFER AND ONLY WISH TO RECEIVE SHARES OF N&B COMMON STOCK IN THE CLEAN-UP SPIN-OFF, YOU WILL NOT BE REQUIRED TO SURRENDER YOUR SHARES OF DUPONT COMMON STOCK IN THE CLEAN-UP SPIN-OFF OR THE MERGER, AND THE CLEAN-UP SPIN-OFF AND MERGER WILL NOT RESULT IN ANY CHANGE IN YOUR OWNERSHIP OF DUPONT COMMON STOCK. DUPONT IS UNABLE TO PREDICT HOW MANY SHARES OF N&B COMMON STOCK WILL BE DISTRIBUTED IN THE CLEAN-UP SPIN-OFF.

 

Q:

Why has DuPont decided to separate the N&B Business from DuPont and combine it with IFF through a Reverse Morris Trust transaction?

 

A:

DuPont has decided to pursue a combination with IFF to create a global leader in high-value ingredients and solutions serving food & beverage, home & personal care and health & wellness end markets. Executing this combination through a Reverse Morris Trust transaction is expected to be tax-efficient to DuPont and its stockholders.

 

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Q:

Why has DuPont decided to separate N&B from DuPont through an Exchange Offer?

 

A:

DuPont believes that distribution of the shares of N&B common stock that it holds to DuPont stockholders by way of an exchange offer, rather than distributing all of the shares of N&B common stock in a pro rata spin-off, is a tax-efficient way to divest its interest in N&B while allowing DuPont’s stockholders an opportunity to adjust their current investment between DuPont and the post-Merger IFF. See “The Transactions—DuPont’s Reasons for the Transactions.” In addition, if the number of shares of DuPont common stock that have been tendered and accepted in the Exchange Offer results in fewer than all shares of N&B common stock being exchanged, then such remaining shares of N&B common stock will be distributed in the Clean-Up Spin-Off. DuPont currently expects the Exchange Offer will not be fully subscribed such that some portion of shares of N&B common stock will be distributed in the Clean-Up Spin-Off, although it is unable to predict how many.

 

Q:

Will DuPont stockholders who sell their shares of DuPont common stock shortly before the completion of the Distribution and Merger still be entitled to receive shares of IFF common stock with respect to the shares of DuPont common stock that were sold?

 

A:

No. Unless the Exchange Offer is terminated by DuPont prior to the expiration date, shares of N&B common stock (and, ultimately, shares of IFF common stock) will only be received by DuPont stockholders that either (i) tender their shares in the Exchange Offer or (ii) are stockholders of DuPont as of the record date, which will be announced by DuPont. As such, DuPont stockholders who sell their shares prior to the completion of the Distribution (such that they cannot tender them or do not hold them on the record date) will not receive any shares of N&B common stock in the Distribution or shares of IFF common stock in the Merger. In addition, any DuPont stockholder who validly tenders (and does not properly withdraw) shares of DuPont common stock for shares of N&B common stock and whose shares are accepted in the Exchange Offer will waive their rights with respect to such shares to receive, and forfeit any rights to, shares of N&B common stock distributed on a pro rata basis to DuPont stockholders in the Clean-Up Spin-Off. To the extent DuPont terminates the Exchange Offer, and determines to distribute the shares of N&B common stock entirely by a pro-rata distribution in the Spin-Off, DuPont will announce in advance any record date with respect to such distribution.

 

Q:

Will holders of DuPont stock options or restricted stock units have the opportunity to exchange their DuPont stock options or restricted stock units for IFF common stock in the Exchange Offer?

 

A:

No, neither holders of vested or unvested stock options nor holders of restricted stock units (including performance-based restricted stock units and time-based restricted stock units) can tender the shares of DuPont common stock underlying such awards in the Exchange Offer. However, holders of vested and unexercised DuPont stock options can exercise their vested stock options in accordance with the terms of the agreements under which the options were issued and tender in the Exchange Offer the shares of DuPont common stock received upon exercise. The exercise of a DuPont stock option cannot be revoked for any reason, including if the Exchange Offer is terminated for any reason or if shares of DuPont common stock received upon exercise are tendered and not accepted for exchange in the Exchange Offer. Additionally, if you hold shares of DuPont common stock as a result of the vesting and settlement of restricted stock units, these shares can be tendered in the Exchange Offer.

If you are a holder of vested and unexercised DuPont stock options and wish to exercise such stock options and tender in the Exchange Offer shares of DuPont common stock received upon exercise, you should be certain to initiate such exercise generally no later than 4:00 p.m., New York City time, on the eighth trading day prior to the expiration of the Exchange Offer, so that the shares of DuPont common stock are received in enough time to tender the shares in accordance with the instructions for tendering.

There are tax consequences associated with the exercise of a stock option, and individual tax circumstances may vary. You are urged to consult the prospectus provided to you in connection with your DuPont stock options and to consult your own tax advisor regarding the consequences to you of exercising your stock

 

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options. You are also urged to read carefully the discussion in “U.S. Federal Income Tax Consequences of the Transactions” and to consult your own tax advisor regarding the consequences to you of the Exchange Offer.

 

Q:

How do the Transactions impact DuPont’s dividend policy?

 

A:

Declarations of dividends on DuPont’s common stock are made at the discretion of DuPont’s board of directors upon the board’s determination that the declaration of dividends is in the best interest of DuPont’s stockholders. In 2019 prior to the distribution of the performance materials business through the spin-off of Dow (as defined below) on April 1, 2019 and the distribution of the agriculture business through the spin-off of Corteva (as defined below) on June 1, 2019, DuPont declared cash pro rata dividends to its stockholders totaling $1,176 million. DuPont has consistently paid a quarterly cash dividend following the consummation of the spin-offs of Dow and Corteva. DuPont remains committed to paying a quarterly cash dividend to its investors commensurate with its earnings and cash flow profile following the Merger, subject to limitations under applicable law and the discretion of DuPont’s board of directors.

 

Q:

What happens if I initiate a trade of shares of DuPont common stock on or prior to the record date of the Clean-Up Spin-Off that does not settle until after the record date? Will I be entitled to shares of N&B common stock?

 

A:

No. DuPont has been advised by the NYSE that shares of DuPont common stock will trade with their entitlement to shares of N&B common stock through the date of the Merger. As a result, if you initiate a trade on or prior to the record date (currently expected to be January 29, 2021) which settles after the record date, you will also be trading your right to receive shares of N&B common stock in the Clean-Up Spin-Off. It is further a requirement of the Exchange Offer that in order to be valid your tender must include all rights and entitlements (including any rights represented by a “due-bill”) for shares of N&B common stock issuable in the Clean-Up Spin-Off. If you hold DuPont common stock through a broker, dealer, commercial bank, trust company or similar institution, that institution must tender your shares on your behalf and will be able to assist you in complying with this requirement. You can also contact the information agent with any questions at the telephone number 888-660-8331.

Questions and Answers about this Prospectus, the Transactions and Related Steps

 

Q:

What are the Transactions described in this prospectus?

 

A:

On December 15, 2019, DuPont, N&B and IFF entered into definitive agreements, pursuant to which and subject to the terms and conditions therein, (1) DuPont will transfer the N&B Business to N&B (generally referred to herein as the Separation), (2) N&B will make a cash distribution to DuPont equal to $7.306 billion, subject to certain adjustments (referred to herein as the Special Cash Payment), (3) DuPont will distribute to its stockholders all of the issued and outstanding shares of N&B common stock by way of an exchange offer followed by a pro rata distribution of any shares of N&B common stock remaining if the exchange offer is not fully subscribed because the number of shares of DuPont common stock that have been tendered and accepted does not result in all shares of N&B common stock being distributed in the exchange offer (generally referred to herein as the Distribution) and (4) Merger Sub I will merge with and into N&B, with N&B as the surviving corporation (generally referred to herein as the Merger). As a result of the Merger, the existing shares of N&B common stock will be automatically converted into the right to receive a number of shares of IFF common stock. When the Merger is completed, holders (or, if such holders exchange all of their shares of DuPont common stock in the Exchange Offer, also former holders) of DuPont’s common stock that received shares of N&B common stock in the Distribution will own approximately 55.4% of the outstanding shares of IFF common stock on a fully diluted basis and existing holders of IFF common stock immediately prior to the Merger will own approximately 44.6% of the outstanding shares of IFF common stock on a fully diluted basis, in each case, excluding any overlaps in the pre-Merger stockholder bases. The Distribution and the Merger are a Reverse Morris Trust transaction and are expected to be tax-free to DuPont stockholders for U.S. federal income tax purposes, except to the extent that cash is paid to DuPont stockholders in lieu of fractional shares in the Distribution or the Merger. The Separation, Distribution and the Mergers are collectively referred to herein as the “Transactions”.

 

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The definitive agreements entered into in connection with the Transactions include (1) the Merger Agreement, (2) the Separation Agreement and (3) the Employee Matters Agreement. In addition, DuPont, N&B, IFF and certain of their respective affiliates will enter into other Ancillary Agreements in connection with the Transactions. These agreements, which are described in greater detail in “Other Agreements,” govern the relationship among DuPont, N&B, IFF and their respective affiliates after the Separation, the Distribution and the Merger.

The Distribution will be conducted through an exchange offer, subject to the conditions to the Exchange Offer as further described in “The Exchange Offer—Conditions to Consummation of the Exchange Offer” of this prospectus. On the closing date of the Merger, DuPont will distribute 100% of the shares of N&B common stock to DuPont stockholders through the Exchange Offer, followed by the expected Clean-Up Spin-Off. In the Exchange Offer, DuPont is offering to DuPont stockholders the option to exchange all or a portion of their shares of DuPont common stock for shares of N&B common stock. Following the Exchange Offer, the shares of N&B common stock remaining if the Exchange Offer is not fully subscribed because the number of shares of DuPont common stock that have been tendered and accepted in the Exchange Offer results in fewer than all of the shares of N&B common stock being exchanged, will be distributed in the Clean-Up Spin-Off on a pro rata basis to DuPont stockholders as of the record date other than in respect of any shares tendered and accepted in the Exchange Offer. Any DuPont stockholder who validly tenders (and does not properly withdraw) shares of DuPont common stock for shares of N&B common stock and whose shares are accepted in the Exchange Offer will waive their rights with respect to such shares to receive, and forfeit any rights to, shares of N&B common stock distributed on a pro rata basis to DuPont stockholders in the Clean-Up Spin-Off. The Exchange Offer Agent will hold all issued and outstanding shares of N&B common stock in trust for the benefit of those stockholders receiving shares of N&B common stock in the Exchange Offer and the Clean-Up Spin-Off, pending the consummation of the Merger. Shares of N&B common stock will not be able to be traded during this period. At the effective time of the Merger, those shares of N&B common stock held in trust by the Exchange Offer Agent will automatically convert into the right to receive shares of IFF common stock, as described above. In addition to the conditions applicable to the Exchange Offer described above, the Distribution is subject to certain conditions set forth in the Separation Agreement and the Merger is subject to certain conditions set forth in the Merger Agreement. See “The Merger Agreement—Conditions to the Merger” and “The Separation Agreement—Conditions to the Distribution.”

No fewer than 30 days (and in some circumstances 15 days) following the Merger, N&B will be merged with and into Merger Sub II, with Merger Sub II surviving as a wholly owned subsidiary of IFF. IFF will own and operate the N&B Business through Merger Sub II and will also continue IFF’s current business. All shares of IFF common stock, including those issued in the Merger, will be listed on the NYSE under IFF’s current trading symbol “IFF.”

 

Q:

What are the steps for the Transactions described above?

 

A:

Below is a step-by-step list illustrating the material events relating to the Separation, the Distribution and the Merger. Each of these events, as well as any conditions to their consummation, is discussed in more detail elsewhere in this prospectus.

Step #1—Internal Reorganization; the Separation. Prior to the Distribution and the Merger, DuPont will convey to N&B or one or more subsidiaries of N&B certain assets and liabilities constituting the N&B Business, and will cause any applicable subsidiary of DuPont to convey to DuPont or its designated subsidiary (other than N&B or any members of the N&B Group) certain excluded assets and excluded liabilities in order to separate the N&B Business, in each case, as set forth in and subject to the terms and conditions of the Separation Agreement. Thereafter, DuPont will transfer all the equity interests in each such subsidiary or subsidiaries of DuPont holding N&B Assets and N&B Liabilities, and constituting the N&B Business, to N&B.

 

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Step #2—Issuance of N&B common stock. Prior to the Distribution, N&B will issue to DuPont a number of shares of N&B common stock such that the number of shares of N&B common stock issued and outstanding at the time of the Distribution is equal to the number of shares to be issued in the Share Issuance.

Step #3—Special Cash Payment; Borrowings. Prior to the effective time of the Merger, and as a condition to the Distribution, N&B will make the Special Cash Payment to DuPont, which is a cash distribution to DuPont equal to $7.306 billion, subject to the adjustments described herein. Prior to making the Special Cash Payment, N&B will receive the proceeds of the Term Loan Facility and the funds in the escrow account from the issuance of the Notes.

Step #4—The Distribution; Exchange Offer and Clean-Up Spin-Off. On the closing date of the Merger, DuPont will distribute 100% of the shares of N&B common stock to DuPont stockholders through the Exchange Offer and the expected Clean-Up Spin-Off. In the Exchange Offer, DuPont is offering its stockholders the option to exchange all or a portion of their shares of DuPont common stock for shares of N&B common stock. Following the Exchange Offer, the shares of N&B common stock remaining if the Exchange Offer is not fully subscribed because the number of shares of DuPont common stock that have been tendered and accepted results in fewer than all shares of N&B common stock being exchanged, will be distributed in the Clean-Up Spin-Off on a pro rata basis to DuPont stockholders as of the record date other than in respect of any shares tendered and accepted in the Exchange Offer. DuPont currently expects that a Clean-Up Spin-Off will be necessary to complete the distribution of all shares of N&B common stock. Any DuPont stockholder who validly tenders (and does not properly withdraw) shares of DuPont common stock for shares of N&B common stock and whose shares are accepted in the Exchange Offer will waive their rights with respect to such shares to receive, and forfeit any rights to, shares of N&B common stock distributed on a pro rata basis to DuPont stockholders in the Clean-Up Spin-Off. See “The Separation Agreement—The Distribution” and “The Exchange Offer.”

The Exchange Offer agent will hold all issued and outstanding shares of N&B common stock in trust for the benefit of stockholders that are receiving shares of N&B common stock in the Exchange Offer and the Clean-Up Spin-Off, pending the consummation of the Merger. Shares of N&B common stock will not be able to be traded during this period.

Step #5—The Mergers. In the Merger, Merger Sub I will be merged with and into N&B, with N&B surviving as a wholly owned subsidiary of IFF. In the Merger, each outstanding share of N&B common stock (except for shares of N&B common stock held by N&B as treasury stock or by DuPont, which will be canceled and cease to exist and no consideration will be delivered in exchange therefor) will be converted into the right to receive a number of shares of IFF common stock such that immediately after the Merger such holders (or, if such holders exchange all of their shares of DuPont common stock in the Exchange Offer, also former holders) of DuPont’s common stock that received shares of N&B common stock in the Distribution will own approximately 55.4% of the outstanding shares of IFF common stock on a fully diluted basis and existing holders of IFF common stock immediately prior to the Merger will own approximately 44.6% of the outstanding shares of IFF common stock on a fully diluted basis, in each case, excluding any overlaps in the pre-Merger stockholder bases (calculated as further described in “The Merger Agreement—Merger Consideration”). No fewer than 30 days (or 15 days, in some circumstances) after the Merger (unless otherwise agreed by the parties), N&B will merge with and into Merger Sub II, with Merger Sub II surviving as a wholly owned subsidiary of IFF.

Immediately after the consummation of the Merger, approximately 55.4% of the outstanding shares of IFF common stock are expected to be held by pre-Merger holders of shares of N&B common stock and approximately 44.6% of the outstanding shares of IFF common stock are expected to be held by pre-Merger IFF shareholders (in each case, excluding any overlaps in the pre-Merger shareholder bases).

The foregoing are subject to certain conditions to their consummation. See “The Exchange Offer—Conditions to Consummation of the Exchange Offer,” “The Merger Agreement—Conditions to the Merger,” “The Separation Agreement—Conditions to the Distribution” and “The Separation Agreement—Conditions to the Internal Reorganization.”

 

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Q:

What are DuPont’s reasons for pursuing the Transactions described in this prospectus?

 

A:

In reaching its decision to approve the Merger Agreement, the Separation Agreement and the Transactions, the DuPont board consulted with DuPont’s senior management as well as DuPont’s legal and financial advisors and considered a wide variety of factors, including the significant factors listed below, as generally supporting its decision:

 

   

the Transactions resulted from a competitive auction process that was conducted by DuPont and its advisors and involved the participation of several interested parties;

 

   

the belief that the Transactions provide the most attractive value with respect to the N&B Business;

 

   

the expectation that the Separation, the Distribution and the Merger generally would result in a tax-efficient disposition of the N&B Business for DuPont and DuPont’s stockholders, while a sale of the N&B Business for cash would result in a taxable disposition for DuPont;

 

   

DuPont would receive approximately $7.3 billion in cash (subject to adjustment) in connection with the Transactions, which would be received tax-free by DuPont to the extent such cash is used for repayment of certain debt, payment of dividends and/or share repurchases;

 

   

due to the shares of IFF common stock that would be received by DuPont stockholders as consideration for the Merger, DuPont stockholders would have the opportunity to participate in the combined IFF and N&B businesses after the consummation of the Transactions; and

 

   

the review by the DuPont board of directors with DuPont’s senior management and legal and financial advisors of the terms and conditions and structure of the Merger Agreement, the Separation Agreement, the form of the Tax Matters Agreement, the Employee Matters Agreement and the other agreements relating to the Transactions, including the parties’ representations, warranties and covenants, the conditions to their respective obligations and the termination provisions, as well as the likelihood of the consummation of the Transactions and the DuPont board of directors’ evaluation of the likely time period necessary to close the Transactions.

In the course of its deliberations, the DuPont board of directors also considered other factors supporting its decision and a variety of risks and other potentially negative factors as set forth in the section entitled “DuPont’s Reasons for the Transactions.”

 

Q:

What are IFF’s reasons for pursuing the Transactions described in this prospectus?

 

A:

In reaching its decision to approve the Transaction Documents and the Transactions and recommend that IFF shareholders approve the Share Issuance, the IFF board of directors considered a wide variety of factors, including the significant factors listed below, as generally supporting its decision:

 

   

the increased size, economies of scale, geographic presence and total capabilities of IFF after the Transactions, which are expected to enable IFF to improve its cost structure, deepen its innovation platform, enhance growth and expand margins;

 

   

the complementary asset portfolios and strengths of IFF and the N&B Business and the expectation that the combination with the N&B Business would diversify and expand IFF’s mix of product offerings, including the N&B Business’s food & beverage, health & biosciences and pharma solutions platforms;

 

   

the belief that IFF would benefit from the scale of the combined company and diversity of its lines of business, making it less dependent on the performance of any particular segment or business line;

 

   

the expectation that IFF would maintain broad market presence, with an enhanced position in the food & beverage, home & personal care and health & wellness markets;

 

   

the expectation that IFF would achieve approximately $300 million of estimated cost synergies anticipated on a run-rate basis by the end of the third year following the consummation of the

 

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Transactions as a result of anticipated procurement improvements along with manufacturing and organizational efficiencies, as well as have an enhanced ability to drive volumes via a combination of cross-selling opportunities across the enhanced portfolio and the creation of integrated solutions, which is expected to generate more than $400 million in run-rate revenue synergies by the end of the third year following the consummation of the Transactions;

 

   

the expectation that the combination of IFF and N&B Business employees’ experience will drive improvements in manufacturing, R&D, leadership and growth, and enhance IFF’s ability to achieve its strategic objectives with respect to its existing business and the businesses of the combined company;

 

   

the expectation that the combined company will provide a compelling value proposition to global, regional and local customers, including through the provision of differentiated integrated solutions using the complementary capabilities of each business;

 

   

the expectation that the cash flow from the combined businesses after the Transactions would be strong enough to allow IFF to maintain its current quarterly dividend policy, reduce indebtedness incurred to finance the Transactions and maintain its investment grade rating;

 

   

the significant increase in total equity market capitalization of IFF, which could increase the trading volume, and therefore, the liquidity, of IFF’s common stock;

 

   

the fact that the consideration payable by IFF in the Merger consists, in part, of IFF’s common stock, enabling IFF to acquire the N&B Business without incurring the amount of indebtedness that would be required to fund an all-cash transaction;

 

   

the fact that IFF shareholders as of immediately prior to the completion of the Merger are expected to own 44.6% of the issued and outstanding shares of common stock of the combined company, on a fully diluted basis, immediately following completion of the Merger, and will have the opportunity to share in the future growth and expected synergies of the combined company while retaining the flexibility of selling all or a portion of those shares;

 

   

the fact that the management team of IFF, following the closing of the Transactions, would continue to be led by IFF’s Chairman and Chief Executive Officer and IFF’s senior management team would be expanded to include executives from IFF and the N&B Business;

 

   

the fact that the Merger Agreement and the other Transaction Documents and the aggregate consideration to be paid by IFF pursuant to the Merger Agreement were the result of extensive arms-length negotiations between representatives of IFF and DuPont, and the IFF board of directors’ belief that IFF had negotiated the transaction terms most favorable to IFF that DuPont would be willing to accept;

 

   

the expectation that IFF’s experience with acquiring and integrating businesses and growing larger companies will enhance IFF’s ability to integrate the N&B Business and grow the combined company;

 

   

the expectation that DuPont’s experience with separating its business lines through prior spin-offs or divestitures would lower the execution risk associated with the separation of the N&B Business from DuPont’s other businesses;

 

   

the expectation that IFF’s board of directors will benefit from expertise provided by the addition to its board of six directors to be designated by DuPont, including Mr. Ed Breen who will join the board of IFF as a DuPont appointee and will serve as Lead Independent Director starting June 1, 2021;

 

   

the support of IFF’s largest shareholder, Winder Investment Pte Ltd (“Winder”), and its willingness to enter into a voting agreement to vote in favor of the Share Issuance;

 

   

the opinion of Greenhill & Co., LLC (“Greenhill”) rendered to the IFF board of directors on December 15, 2019, that, as of the date of the written fairness opinion and based upon and subject to the factors and assumptions set forth in such written fairness opinion, the exchange ratio set forth in the

 

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Merger Agreement was fair from a financial point of view to IFF, as more fully described below in “Opinion of Greenhill & Co., LLC;”

 

   

the opinion of Morgan Stanley & Co. LLC (“Morgan Stanley”) rendered to the IFF board of directors on December 15, 2019, that, as of such date and based upon and subject to the assumptions made, procedures followed, matters considered, and qualifications and limitations on the scope of review undertaken by Morgan Stanley as set forth in such written fairness opinion, the exchange ratio pursuant to the Merger Agreement was fair from a financial point of view to IFF, as more fully described below in “Opinion of Morgan Stanley & Co. LLC;” and

 

   

the ability of the IFF board of directors to withdraw or modify its recommendation that IFF’s shareholders approve the Share Issuance, subject to the limitations set forth in the Merger Agreement, including, without limitation, the potential payment of a termination fee and the obligation of IFF to proceed with a vote of IFF’s shareholders on the Share Issuance regardless of such withdrawal or modification of its recommendation.

In the course of its deliberations, the IFF board of directors also considered a variety of risks and other potentially negative factors as set forth in the section entitled “IFF’s Reasons for the Transactions.”

 

Q:

Why will the ownership of IFF following the Transactions between DuPont equityholders and existing IFF equityholders be approximately 55.4% and 44.6% on a fully diluted basis, respectively?

 

A:

It is expected that upon completion of the Transactions, pre-Merger holders of shares of N&B common stock and N&B Employees will hold approximately 55.4% of IFF’s common stock on a fully diluted basis and IFF’s existing equityholders will hold approximately 44.6% of IFF’s common stock on a fully diluted basis (in each case, excluding any overlaps in the pre-Merger shareholder bases). The ownership of IFF following the Merger was the result of a negotiated value exchange between DuPont and IFF, which was based upon each party’s valuations, prior to the execution of the Merger Agreement and the Separation Agreement, of IFF and the N&B Business.

 

Q:

What will DuPont stockholders receive in the Transactions?

 

A:

In the Exchange Offer, DuPont is offering to DuPont stockholders the option to exchange all or a portion of their shares of DuPont common stock for shares of N&B common stock. Following the Exchange Offer, the shares of N&B common stock remaining if the Exchange Offer is not fully subscribed, will be distributed on a pro rata basis in the Clean-Up Spin-Off to DuPont stockholders as of the record date other than in respect of any shares tendered and accepted in the Exchange Offer. In the Merger, the shares of N&B common stock will be automatically converted into the right to receive shares of IFF common stock. DuPont stockholders participating in the Exchange Offer will be required to exchange those shares that they tender in the Exchange Offer and that are not properly withdrawn and accepted by DuPont for the shares of N&B common stock they receive therefore (see “The Exchange Offer—Terms of the Exchange Offer”). If the Exchange Offer is terminated by DuPont without the exchange of shares (but the conditions to consummation of the Transactions have otherwise been satisfied), DuPont intends to distribute all shares of N&B common stock owned by DuPont on a pro rata basis to holders of DuPont common stock in the Spin-Off, with a record date to be announced by DuPont.

In the Merger, each outstanding share of N&B common stock (except for shares of N&B common stock held by N&B as treasury stock or by DuPont, which will be canceled and cease to exist and no consideration will be delivered in exchange therefor) will be converted into the right to receive a number of shares of IFF common stock such that immediately after the Merger such holders (or, if such holders exchange all of their shares of DuPont common stock in the Exchange Offer, also former holders) of DuPont’s common stock that received shares of N&B common stock in the Distribution will own approximately 55.4% of the outstanding shares of IFF common stock on a fully diluted basis and existing holders of IFF common stock immediately prior to the Merger will own approximately 44.6% of the outstanding shares of IFF common

 

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stock on a fully diluted basis, in each case, excluding any overlaps in the pre-Merger stockholder bases (calculated as further described in “The Merger Agreement—Merger Consideration”). Holders of N&B common stock will receive cash from the Exchange Agent in lieu of any fractional shares of IFF common stock to which such stockholders would otherwise be entitled. All shares of IFF common stock issued in the Merger will be issued in book entry form.

Calculated based on the closing price on the NYSE of IFF common stock as of December 30, 2020 and assuming a Share Issuance of 142,122,386, the shares of IFF common stock that IFF expects to issue to DuPont stockholders as a result of the Transactions would have had a market value of approximately $15.813 billion in the aggregate (the actual value will not be known until the closing date of the Merger). For more information, see “The Transactions—The Separation and the Distribution” beginning on page 212, “The Transactions—The Merger” beginning on page 213 and “The Transactions—The Merger—Calculation of the Merger Consideration” beginning on page 214.

 

Q:

Are there any conditions to the consummation of the Transactions?

 

A:

Yes. Consummation of the Transactions is subject to a number of conditions, including:

 

   

the approval by IFF’s shareholders of the Share Issuance, which condition has been satisfied;

 

   

the registration statements on Forms S-4 and S-1 of which this prospectus is a part have become effective under the Securities Act;

 

   

the Separation and the Distribution shall have been consummated;

 

   

the expiration or termination of any waiting period applicable to the Merger under applicable antitrust or competition laws in the United States (which waiting period has expired and approvals have been received) and receipt of additional antitrust approvals in applicable jurisdictions;

 

   

DuPont shall have received the Special Cash Payment immediately before the Distribution;

 

   

the receipt by DuPont of the Tax Opinion from DuPont’s tax counsel, dated as of the closing date of the Merger; and

 

   

other customary conditions.

For a description of the material conditions precedent to the Transactions, see “The Merger Agreement—Conditions to the Merger” and “The Separation Agreement—Conditions to the Distribution.”

 

Q:

What will IFF shareholders receive in the Merger?

 

A:

IFF shareholders will not directly receive any consideration in the Merger. All shares of IFF common stock issued and outstanding immediately before the Merger will remain issued and outstanding after the consummation of the Merger. Immediately after the Merger, IFF shareholders will continue to own shares in IFF, which will include the N&B Business by virtue of the fact that N&B will be a wholly owned subsidiary of IFF. IFF will also be responsible for repaying the approximately $7.5 billion of debt incurred or refinanced in connection with the Transactions in connection with paying the Special Cash Payment. After the consummation of the Merger, the debt obligations incurred by N&B in connection with the Special Cash Payment will be guaranteed by IFF. In addition, following the Merger, by virtue of the fact N&B will be a wholly owned subsidiary of IFF, the consolidated indebtedness of IFF and its subsidiaries will include the indebtedness incurred by N&B in the debt financings completed prior to the Distribution (See “Debt Financing”). At the election of N&B and IFF, IFF may assume these N&B obligations, which assumption is expected to occur after the Second Merger.

 

Q:

What is the estimated total value of the Transactions?

 

A:

IFF expects to issue approximately 142 million shares of IFF common stock in the Merger. In addition, DuPont will receive a one-time Special Cash Payment from N&B, subject to certain adjustments. Based

 

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  upon the reported closing sale price of $111.26 per share for IFF common stock on the NYSE on December 30, 2020 and assuming a Share Issuance of 142,122,386 and no adjustments to the Special Cash Payment, the total combined value of the shares to be issued by IFF and the cash expected to be received by DuPont from N&B would have been approximately $ 23.119 billion. The actual value of the IFF common stock to be issued in the Merger will depend on the market price of shares of IFF common stock at the time of determination and the amount of the Special Cash Payment will be determined based on adjustments thereto (if any), see “The Separation Agreement—The Separation—Special Cash Payment and Post-Closing Adjustments.”

 

Q:

Are there possible adverse effects on the value of IFF common stock to be received by DuPont stockholders?

 

A:

DuPont stockholders, by virtue of the expected Clean-Up Spin-Off, and if they elect to exchange their shares of DuPont common stock for shares of N&B common stock in the Exchange Offer, will receive shares of IFF common stock. The Share Issuance (as well as any discount in the Exchange Offer), may negatively affect the market price of IFF common stock. IFF also expects to incur significant one-time costs in connection with the Transactions, including advisory, legal, accounting and other professional fees related to the Transactions, transition and integration expenses, such as consulting professionals’ fees, information technology implementation costs, financing fees and relocation costs, that IFF management believes are necessary to realize anticipated annualized cost synergies. The incurrence of these costs may have an adverse impact on IFF’s liquidity or operating results in the periods in which they are incurred. Finally, IFF will be required to devote a significant amount of time and attention to the process of integrating the operations of IFF and the N&B Business. If IFF is not able to effectively manage the process, IFF’s business could suffer and its stock price may decline. In addition, the market price of IFF common stock could decline as a result of sales of a large number of shares of IFF common stock in the market after the consummation of the Transactions or even the perception that these sales could occur. See “Risk Factors” for a further discussion of the material risks associated with the Transactions.

 

Q:

How will the Transactions impact the future liquidity and capital resources of IFF?

 

A:

IFF’s level of indebtedness will increase as a result of the Transactions. In connection with the Transactions, N&B will be the initial borrower under the Term Loan Facility and the initial issuer of the Notes, incurring total indebtedness of approximately $7.5 billion. Following the consummation of the Transactions, all obligations of N&B with respect to the Term Loan Facility and the Notes will be guaranteed by IFF or at the election of N&B and IFF, IFF may assume these N&B obligations, which assumption is expected to occur after the Second Merger. In addition, following the Merger, by virtue of the fact N&B will be a wholly owned subsidiary of IFF, the consolidated indebtedness of IFF and its subsidiaries will include the indebtedness incurred by N&B in the debt financings completed prior to the Distribution (See “Debt Financing”). IFF anticipates that its primary sources of liquidity for working capital and operating activities will be cash from operations and borrowings under its existing credit facilities. IFF expects that these sources of liquidity will be sufficient to make required payments of interest on the outstanding IFF debt and to fund working capital and capital expenditure requirements, including the significant one-time costs relating to the Transactions. IFF expects that it will be able to comply with the financial and other covenants under the credit agreement governing the Term Loan Facility and the Indenture governing the Notes.

IFF expects to realize cost synergies of approximately $300 million on a run-rate basis by the end of the third year after the closing of the Merger. These cost synergies are expected to be driven by procurement excellence, streamlining overhead and manufacturing efficiencies. In addition, IFF’s target is to deliver more than $400 million in run-rate revenue synergies, which would result in more than $175 million of EBITDA, driven by cross-selling opportunities and leveraging the expanded capabilities across a broader customer base. IFF expects to incur significant, one-time costs in connection with the Transactions of approximately $355 million in transaction-related costs (before accounting for an estimated $40 million of capital expenditure synergies) over the first three years following the consummation of the Transactions that

 

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IFF management believes are necessary to realize the anticipated synergies from the Transactions. See “Information on IFF—IFF’s Liquidity and Capital Resources After the Transactions.” The incurrence of these costs may have an adverse impact on IFF’s liquidity, cash flows and operating results in the periods in which they are incurred.

 

Q:

How do the Transactions impact IFF’s dividend policy?

 

A:

Declarations of dividends on IFF’s common stock are made at the discretion of IFF’s board of directors upon the board’s determination that the declaration of dividends are in the best interest of IFF’s shareholders. IFF has consistently paid regular dividends, and in 2019, IFF’s board of directors declared total cash dividends of $2.96 per share. Following the Merger, IFF intends to maintain its current dividend policy and remains committed to maintaining its history of paying a dividend to investors, as determined by its Board of Directors at its discretion based on various factors.

 

Q:

What will DuPont receive in the Transactions?

 

A:

Prior to the Distribution, DuPont will receive the Special Cash Payment in the amount of approximately $7.3 billion, subject to adjustment. See “The Separation Agreement—The Separation—Special Cash Payment and Post-Closing Adjustments.”

 

Q:

Will the Separation, the Distribution or the Merger affect the DuPont Equity Awards held by employees of the N&B Business who become N&B Employees?

 

A:

Yes. Certain employees of the N&B Business who will become N&B Employees may hold DuPont Options, DuPont Stock Appreciation Rights, DuPont RSU Awards, DuPont PSU Awards or DuPont Restricted Stock Awards. Upon consummation of the Merger, each DuPont Option and DuPont Stock Appreciation Right that is held by a DuPont employee who becomes an N&B Employee will be converted into an IFF Option or IFF stock appreciation right, as applicable. Upon consummation of the Merger, each DuPont RSU Award that is held by a DuPont employee who becomes an N&B Employee will be converted into an IFF RSU, and will otherwise be subject to the same terms and conditions (excluding any rights to dividend equivalents after the closing date of the Merger). Upon consummation of the Merger, each DuPont PSU Award that is held by a DuPont employee who becomes an N&B Employee will be converted into an IFF RSU (excluding any rights to dividend equivalents after the closing date of the Merger), with the performance criteria under the DuPont PSU Award deemed satisfied at the actual level of performance immediately prior to the closing date of the Merger. Each DuPont Restricted Stock Award that is held by a DuPont employee who becomes an N&B Employee will be converted into IFF restricted stock upon consummation of the Merger.

For a more complete description of the treatment of DuPont Equity Awards held by employees of DuPont who become N&B Employees that are outstanding as of the effective time of the Merger, see “The Transactions—Effects of the Distribution and the Merger on DuPont Equity Awards” beginning on page 267.

 

Q:

Will the Separation, the Distribution or the Merger affect the DuPont equity-based awards held by current and former employees of DuPont who do not become N&B Employees?

 

A:

Certain current and former employees of DuPont who will not become N&B Employees hold equity-based awards relating to shares of DuPont common stock. The number and the exercise price of DuPont Options and DuPont Stock Appreciation Rights held by these current and former employees may be adjusted if determined by the DuPont board of directors to be necessary so that there is no change by reason of the proposed Transactions to the intrinsic value of the options or stock appreciation rights (the excess of the fair market value of the underlying shares of DuPont common stock over the award’s aggregate exercise price) or the ratio of the award’s aggregate exercise price to the fair market value of the underlying shares of DuPont common stock, and the number of other DuPont Equity Awards held by these current and former

 

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  employees may be similarly adjusted to the extent necessary so that there is no change by reason of the proposed Transactions to the aggregate fair market value of the DuPont Equity Awards. In addition, any performance based vesting conditions applicable to the DuPont Equity Awards may be adjusted if determined by the DuPont board of directors to be necessary to reflect the proposed Transactions.

 

Q:

What are the material U.S. federal income tax consequences to DuPont stockholders resulting from the Distribution and the Mergers?

 

A:

The completion of the Internal Reorganization, Distribution, and Merger is conditioned upon the receipt by DuPont of a tax opinion from counsel to the effect that, among other things, for U.S. federal income tax purposes, (a) the Parent Contribution, Special Cash Payment and Distribution, taken together, will qualify as a reorganization under Sections 355(a), 361 and 368(a)(1)(D) of the Code and (b) the Merger and the Second Merger will be treated as an integrated plan described in Rev. Rul. 2001-46, 2001-2 C.B. 321 and qualify as a tax-free reorganization within the meaning of Section 368(a) of the Code (the “Tax Opinion”). Provided that the Parent Contribution, Special Cash Payment and Distribution so qualify, DuPont’s stockholders will not recognize any taxable income, gain or loss as a result of receiving N&B shares in the Distribution for U.S. federal income tax purposes. Provided that the Mergers so qualify, DuPont’s stockholders will not recognize any taxable income, gain or loss as a result of the Mergers for U.S. federal income tax purposes (except for any gain or loss attributable to the receipt of cash in lieu of fractional shares of IFF common stock). See “U.S. Federal Income Tax Consequences of the Transactions” for more information regarding the potential tax consequences of the Transactions.

 

Q:

What are the material U.S. federal income tax consequences to IFF and IFF’s shareholders resulting from the Transactions?

 

A:

IFF will not recognize any gain or loss for U.S. federal income tax purposes as a result of the Mergers. Because IFF shareholders will not participate in the Distribution or the Mergers, IFF shareholders will generally not recognize gain or loss upon either the Distribution (including the Exchange Offer) or the Mergers. IFF shareholders should consult their own tax advisors for a full understanding of the tax consequences to them of the Distribution and the Mergers.

 

Q:

Are there risks associated with the Transactions?

 

A:

Yes. The material risks and uncertainties associated with the Transactions are discussed in the section entitled “Risk Factors” beginning on page 65 and the section entitled “Cautionary Statement Concerning Forward-Looking Statements” beginning on page 102. Those risks include, among others, the possibility that the Transactions may not be completed, the possibility that IFF may fail to realize the anticipated benefits of the Merger, the uncertainty that IFF will be able to integrate the N&B Business successfully, the possibility that IFF may be unable to provide benefits and services or access to equivalent financial strength and resources to the N&B Business that historically have been provided by DuPont, and the substantial dilution to the ownership interest of current IFF shareholders following the consummation of the Merger.

 

Q:

Who will serve on the IFF board of directors following completion of the Merger?

 

A:

As of the effective time of the Merger, the IFF board of directors will consist of 13 members, consisting of seven current IFF directors selected by the IFF board of directors and six individuals selected by the DuPont board of directors. The IFF designees will include Andreas Fibig, who will continue to serve as Chairman and CEO of IFF. Current DuPont Executive Chairman and CEO Ed Breen will join the board of IFF following the effective time of the Merger as a DuPont designee and will serve as Lead Independent Director starting upon the later of June 1, 2021 and the closing date of the Merger. On May 11, 2020, IFF and DuPont announced two additional DuPont director designees who are expected to join the board of the combined company at the effective time of the Merger, Matthias Heinzel, N&B President, and Carol A. (John) Davidson, a CPA with more than 30 years of leadership experience across multiple industries. At the

 

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  2022 annual meeting of IFF shareholders, the IFF board of directors will take all actions necessary to set the size of the IFF board of directors at 12 members, and to include (i) DuPont’s six designated directors (or any replacements thereof) and (ii) six of IFF’s current directors (or any replacements thereof) as nominees to serve a full new term on IFF’s board of directors. Until the second annual meeting of IFF that occurs after consummation of the Merger, (i) if a vacancy is created by the cessation of service of any DuPont designated director, then the remaining DuPont designated directors then in office will designate a replacement by a majority vote, even if less than a quorum, or by a sole DuPont designated director; and (ii) if a vacancy is created by the cessation of service of any IFF director, then the remaining IFF directors then in office will designate a replacement by a majority vote, even if less than a quorum, or by a sole remaining IFF director.

 

Q:

Will IFF’s current senior management team manage the business of IFF after the Transactions?

 

A:

Andreas Fibig will continue to serve as Chairman and CEO of IFF. The Executive Committee of the combined company is expected to also include the individuals listed in the section entitled “Information on IFF—Directors and Officers of IFF Before and After the Transactions.” IFF and N&B have formed an Integration Office, comprised of leaders from both companies, to manage the integration of the companies.

 

Q:

What stockholder approvals are needed in connection with the Transactions?

 

A:

IFF shareholders approved the Share Issuance by the affirmative vote of a majority of the shares of IFF common stock represented and voting at the special meeting held on August 27, 2020. No vote of DuPont stockholders is required or being sought in connection with the Transactions.

 

Q:

Where will the IFF shares issued in connection with the Merger be listed?

 

A:

IFF common stock is listed on the NYSE and TASE under “IFF.” On October 20, 2020, IFF announced that it is voluntarily delisting its shares of common stock from trading on the TASE, which will become effective on January 20, 2021. On November 19, 2020, IFF announced that it is voluntarily delisting its shares of common stock from trading on the Euronext Paris, which became effective on December 18, 2020. After consummation of the Transactions, all shares of IFF common stock issued in the Merger, and all other outstanding shares of IFF common stock, will continue to be listed on the NYSE.

 

Q:

What is the current relationship between N&B and IFF?

 

A:

N&B is currently a wholly owned subsidiary of DuPont and was formed as a Delaware corporation on October 30, 2019 to effectuate the Separation, the Distribution and the Merger. Other than in connection with the Transactions, there is no relationship between N&B and IFF.

 

Q:

When will the Transactions be completed?

 

A:

IFF and DuPont expect the Transactions to be completed in the first quarter of 2021, subject to satisfaction of the closing conditions, including receipt of IFF shareholder approval for the Share Issuance and certain regulatory approvals. IFF shareholders approved the Share Issuance at a special meeting on August 27, 2020 and the status of regulatory approvals is set forth on page 270. In addition, other important conditions to the closing of the Merger exist, including, among other things, the completion of the Separation necessary to separate the N&B Assets and the N&B Liabilities from DuPont’s other businesses and to realign the N&B Companies holding the N&B Assets and the N&B Liabilities under N&B and the receipt by DuPont of the Tax Opinion from its tax counsel. It is possible that factors outside IFF’s and DuPont’s control could require DuPont to complete the Separation and the Distribution and IFF and DuPont to complete the Merger at a later time or not complete them at all. For a discussion of the conditions to the Separation and the Merger, see “The Transactions—Regulatory Approvals” beginning on page 270, “The Merger Agreement—Conditions to the Merger” beginning on page 291, and “The Separation Agreement—Conditions to the Distribution” beginning on page 305.

 

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Q:

Does the Merger Agreement contain an outside date which, once reached, allows a party to terminate?

 

A:

Yes. Subject to specified qualifications and exceptions, either DuPont or IFF may terminate the Merger Agreement at any time prior to the consummation of the Merger if the Merger has not been consummated by March 15, 2021 or, in certain circumstances at the election of DuPont or IFF, by June 15, 2021. See “The Merger Agreement—Termination.”

 

Q:

Does IFF have to pay anything to DuPont if the Merger Agreement is terminated?

 

A:

Depending on the reasons for termination of the Merger Agreement, IFF may have to pay DuPont a termination fee of $521.5 million (referred to herein as the Termination Fee) or reimburse DuPont for its expenses in connection with the Transactions not to exceed $75 million. DuPont and IFF have also agreed to split 50/50 any commitment fees incurred to the extent the Merger Agreement is terminated. For a discussion of the circumstances under which the Termination Fee is payable by IFF or the requirement to reimburse expenses applies, see “The Merger Agreement—Termination Fees and Expenses Payable in Certain Circumstances.”

 

Q:

Does DuPont have to pay anything to IFF if the Merger Agreement is terminated?

 

A:

Depending on the reasons for termination of the Merger Agreement, DuPont may have to reimburse IFF for its expenses in connection with the Transactions not to exceed $75 million. For a discussion of the circumstances under which the Termination Fee is payable by DuPont, see “The Merger Agreement—Termination Fees and Expenses Payable in Certain Circumstances.”

 

Q:

Who can answer my questions about the Transactions or the Exchange Offer?

 

A:

If you have any questions about the Transactions or the Exchange Offer or you would like to request additional documents, including copies of this prospectus and the letter of transmittal (including the instructions thereto), please contact the information agent, Georgeson LLC, located at 1290 Avenue of the Americas, 9th Floor, New York, NY 10104 at the telephone number 888-660-8331.

 

Q:

Who is the transfer agent for IFF common stock and the Exchange Agent for the Merger?

 

A:

American Stock Transfer & Trust Company is the transfer agent for IFF common stock and will be the exchange agent (the “Exchange Agent”) for the Merger.

 

Q:

Who is the transfer agent for DuPont common stock and the Exchange Offer Agent for the Distribution?

 

A:

Computershare is the transfer agent for DuPont common stock and the Exchange Offer Agent for the Distribution.

 

Q:

Where can I find more information about DuPont, IFF, N&B and the Transactions?

 

A:

You can find out more information about DuPont, IFF, N&B and the Transactions by reading this prospectus and, with respect to DuPont and IFF, from various sources described in “Where You Can Find More Information; Incorporation By Reference” beginning on page 351.

 

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SUMMARY

The following summary contains certain information described in more detail elsewhere in this prospectus. It does not contain all the details concerning the Transactions, including information that may be important to you. To better understand the Transactions, you should carefully review this entire document and the documents it refers to. See “Where You Can Find More Information; Incorporation by Reference.”

The Companies

International Flavors & Fragrances Inc.

International Flavors & Fragrances Inc.

521 West 57th Street

New York, NY 10019-2960

Telephone: (212) 765-5500

IFF is a leading innovator of sensory experiences that move the world. IFF’s creative capabilities, global footprint and regulatory and technological know-how provides IFF a competitive advantage in meeting the demands of its global, regional and local customers around the world. IFF’s product portfolio covers taste, scent and complementary adjacent products, and IFF has over 128,000 individual products that are provided to customers in approximately 200 countries.

Neptune Merger Sub I

Neptune Merger Sub I Inc.

c/o International Flavors & Fragrances Inc.

521 West 57th Street

New York, NY 10019-2960

Telephone: (212) 765-5500

Neptune Merger Sub I Inc., a Delaware corporation, is a newly formed, direct wholly owned subsidiary of IFF that was organized specifically for the purpose of completing the Merger. Merger Sub I has engaged in no business activities to date and it has no material assets or liabilities of any kind, other than those incident to its formation and in connection with the Transactions.

DuPont de Nemours, Inc.

DuPont de Nemours, Inc.

974 Centre Road,

Wilmington, DE 19805

Telephone: (302) 774-3034

DuPont was incorporated in 2015 (formerly, DowDuPont Inc.) for the purpose of effecting an all-stock merger of equals between The Dow Chemical Company and E. I. du Pont de Nemours and Company with the intent to separate into three, independent, publicly traded companies – one for each of its post-merger agriculture, materials science and specialty products businesses. On April 1, 2019, DuPont completed the separation of its materials science business into a separate and independent public company by way of a distribution of Dow Inc. (“Dow”) through a pro rata dividend in-kind of all of the then-issued and outstanding shares of Dow’s common stock (the “Dow Distribution”). On June 1, 2019, DuPont completed the separation of its agriculture business into a separate and independent public company by way of a distribution of Corteva, Inc. (“Corteva”) through a pro rata dividend



 

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in-kind of all of the then-issued and outstanding shares of Corteva’s common stock (the “Corteva Distribution”). Following the Corteva Distribution, DuPont holds the specialty products business as continuing operations.

Today, DuPont is a global innovation leader with technology-based materials, ingredients and solutions that help transform industries and everyday life by applying diverse science and expertise to help customers advance their best ideas and deliver essential innovations in key markets including electronics, transportation, building and construction, health and wellness, food and worker safety. DuPont had approximately 35,000 employees as of December 31, 2019. DuPont has subsidiaries in about 70 countries worldwide and manufacturing operations in about 40 countries.

Nutrition & Biosciences, Inc.

Nutrition & Biosciences, Inc.

974 Centre Road,

Wilmington, DE 19805

Telephone: (302) 774-3034

Nutrition & Biosciences, Inc., a Delaware corporation, is a newly formed, direct wholly owned subsidiary of DuPont that was organized specifically for the purpose of effecting the Separation. N&B has engaged in no business activities to date and it has no material assets or liabilities of any kind, other than those incident to its formation and those incurred in connection with the Transactions. In connection with the Transactions, N&B has entered into several arrangements which will provide financing, and has issued Notes in an aggregate principal amount of $6.25 billion, in each case to fund the Special Cash Payment. For more information see “Debt Financing.”

N&B is a holding company. In the Separation, DuPont will transfer the N&B Assets that are not already owned by members of the N&B Group to members of the N&B Group and members of the N&B Group will assume the N&B Liabilities that are not already directly owed by or otherwise directly the responsibility of members of the N&B Group, and DuPont will transfer the Excluded Assets that are not already directly owned by members of the DuPont Group to members of the DuPont Group and the DuPont Group will assume the Excluded Liabilities that are not already directly owed by or otherwise the responsibility of members of the DuPont Group. Prior to the Distribution, DuPont will transfer all the equity interests in each member of the N&B Group (i.e., such subsidiary of DuPont holding assets and liabilities constituting a portion of the N&B Business) to N&B. In exchange, N&B will: (i) issue to DuPont shares of N&B common stock and (ii) pay to DuPont the Special Cash Payment.

The Transactions

On December 15, 2019, DuPont, N&B and IFF entered into definitive agreements, pursuant to which and subject to the terms and conditions therein, (1) DuPont will transfer the N&B Business to N&B (generally referred to herein as the Separation), (2) N&B will make a cash distribution to DuPont equal to $7.306 billion, subject to certain adjustments (referred to herein as the Special Cash Payment), (3) DuPont will distribute to its stockholders all of the issued and outstanding shares of N&B common stock by way of an exchange offer followed by a pro rata distribution of any shares of N&B common stock remaining if the exchange offer is not fully subscribed because the number of shares of DuPont common stock that have been tendered and accepted does not result in all shares of N&B common stock being distributed in the exchange offer (generally referred to herein as the Distribution) and (4) Merger Sub I will merge with and into N&B, with N&B as the surviving corporation (generally referred to herein as the Merger). As a result of the Merger, the existing shares of N&B common stock will be automatically converted into the right to receive a number of shares of IFF common stock. When the Merger is completed, holders (or, if such holders exchange all of their shares of DuPont common stock



 

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in the Exchange Offer, also former holders) of DuPont’s common stock that received shares of N&B common stock in the Distribution will own approximately 55.4% of the outstanding shares of IFF common stock on a fully diluted basis and existing holders of IFF common stock immediately prior to the Merger will own approximately 44.6% of the outstanding shares of IFF common stock on a fully diluted basis, in each case, excluding any overlaps in the pre-Merger stockholder bases. The Distribution and the Merger are a Reverse Morris Trust transaction and are expected to be tax-free to DuPont stockholders for U.S. federal income tax purposes, except to the extent that cash is paid to DuPont stockholders in lieu of fractional shares in the Distribution or the Merger. The Separation, Distribution and the Merger are collectively referred to herein as the “Transactions”.

The definitive agreements entered into in connection with the Transactions include (1) the Merger Agreement, (2) the Separation Agreement and (3) the Employee Matters Agreement. In addition, DuPont, N&B, IFF and certain of their respective affiliates will enter into other Ancillary Agreements in connection with the Transactions. These agreements, which are described in greater detail in “Other Agreements,” govern the relationship among DuPont, N&B, IFF and their respective affiliates after the Separation, the Distribution and the Merger.

The N&B Business is one of the world’s largest producers of specialty ingredients, and is an innovation-driven and customer-focused business that provides solutions for the global food and beverage, dietary supplements, home and personal care, energy, animal nutrition and pharma markets. Additionally, the N&B Business is an industry pioneer and innovator that works with customers to improve the performance, productivity and sustainability of their products and processes through differentiated technology in ingredients applications, fermentation, biotechnology, chemistry and manufacturing process excellence. Prior to the Distribution and the Merger, DuPont will undertake the Separation and transfer the N&B Assets that are not already owned by members of the N&B Group to members of the N&B Group and members of the N&B Group will assume the N&B Liabilities that are not already directly owed by or otherwise directly the responsibility of members of the N&B Group, and DuPont will transfer of Excluded Assets that are not already directly owned by members of the DuPont Group to members of the DuPont Group and the DuPont Group will assume the Excluded Liabilities that are not already directly owed by or otherwise the responsibility of members of the DuPont Group. Thereafter, DuPont will transfer all the equity interests in each member of the N&B Group (i.e., such subsidiary of DuPont holding assets and liabilities constituting a portion of the N&B Business) to N&B. In exchange, N&B will: (i) issue to DuPont shares of N&B common stock and (ii) pay to DuPont the Special Cash Payment.

The Distribution will be conducted through an exchange offer, subject to the conditions to the Exchange Offer as further described in “The Exchange Offer—Conditions to Consummation of the Exchange Offer” of this prospectus. On the closing date of the Merger, DuPont will distribute 100% of the shares of N&B common stock to DuPont stockholders through the Exchange Offer, followed by the expected Clean-Up Spin-Off. In the Exchange Offer, DuPont is offering to DuPont stockholders the option to exchange all or a portion of their shares of DuPont common stock for shares of N&B common stock. Following the Exchange Offer, the shares of N&B common stock remaining if the Exchange offer is not fully subscribed because the number of shares of DuPont common stock that have been tendered and accepted results in fewer than all shares of N&B common stock being exchanged, will be distributed in the Clean-Up Spin-Off on a pro rata basis to DuPont stockholders as of the record date other than in respect of any shares tendered and accepted in the Exchange Offer. Any DuPont stockholder who validly tenders (and does not properly withdraw) shares of DuPont common stock for shares of N&B common stock and whose shares are accepted in the Exchange Offer will waive their rights with respect to such shares to receive, and forfeit any rights to, shares of N&B common stock distributed on a pro rata basis to DuPont stockholders in the Clean-Up Spin-Off. The Exchange Offer Agent will hold all issued and outstanding shares of N&B common stock in trust for the benefit of those stockholders receiving shares of N&B common stock in the Exchange Offer and the Clean-Up Spin-Off, pending the consummation of the Merger. Shares of N&B common stock will not be able to be traded during this period. At the effective time of the Merger, those shares of N&B common stock held in trust by the Exchange Offer Agent will automatically convert into the right



 

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to receive shares of IFF common stock, as described above. In addition to the conditions applicable to the Exchange Offer described above, the Distribution is subject to certain conditions set forth in the Separation Agreement and the Merger is subject to certain conditions set forth in the Merger Agreement. See “The Merger Agreement—Conditions to the Merger” and “The Separation Agreement—Conditions to the Distribution.” DuPont currently expects the Exchange Offer will not be fully subscribed such that some portion of shares of N&B common stock will be distributed in the Clean-Up Spin-Off, although it is unable to predict how many.

Transaction Steps

Below is a step-by-step list illustrating the material events relating to the Separation, the Distribution and the Merger. Each of these events, as well as any conditions to their consummation, is discussed in more detail elsewhere in this prospectus.

Step #1—Internal Reorganization; the Separation. Prior to the Distribution and the Merger, DuPont will convey to N&B or one or more subsidiaries of N&B certain assets and liabilities constituting the N&B Business, and will cause any applicable subsidiary of DuPont to convey to DuPont or its designated subsidiary (other than N&B or any members of the N&B Group) certain excluded assets and excluded liabilities in order to separate the N&B Business, in each case, as set forth in and subject to the terms and conditions of the Separation Agreement. Thereafter, DuPont will transfer all the equity interests in each such subsidiary or subsidiaries of DuPont holding N&B Assets and N&B Liabilities, and constituting the N&B Business, to N&B.

Step #2—Issuance of N&B common stock. Prior to the Distribution, N&B will issue to DuPont a number of shares of N&B common stock such that the number of shares of N&B common stock issued and outstanding at the time of the Distribution is equal to the number of shares to be issued in the Share Issuance.

Step #3—Special Cash Payment; Borrowings. Prior to the effective time of the Merger, and as a condition to the Distribution, N&B will make the Special Cash Payment to DuPont, which is a cash distribution to DuPont equal to $7.306 billion, subject to the adjustments described herein. Prior to making the Special Cash Payment, N&B will receive the proceeds of the Term Loan Facility and the funds in the escrow account from the issuance of the Notes.

Step #4— The Distribution; Exchange Offer and Clean-Up Spin-Off. On the closing date of the Merger, DuPont will distribute 100% of the shares of N&B common stock to DuPont stockholders through the Exchange Offer and the expected Clean-Up Spin-Off. In the Exchange Offer, DuPont is offering its stockholders the option to exchange all or a portion of their shares of DuPont common stock for shares of N&B common stock. Following the Exchange Offer, the shares of N&B common stock remaining if the Exchange Offer is not fully subscribed because the number of shares of DuPont common stock that have been tendered and accepted results in fewer than all shares of N&B common stock being exchanged, will be distributed in the Clean-Up Spin-Off on a pro rata basis to DuPont stockholders as of the record date other than in respect of any shares tendered and accepted in the Exchange Offer. DuPont currently expects that a Clean-Up Spin-Off will be necessary to complete the distribution of all shares of N&B common stock. Any DuPont stockholder who validly tenders (and does not properly withdraw) shares of DuPont common stock for shares of N&B common stock and whose shares are accepted in the Exchange Offer will waive their rights with respect to such shares to receive, and forfeit any rights to, shares of N&B common stock distributed on a pro rata basis to DuPont stockholders in the Clean-Up Spin-Off. See “The Separation Agreement—The Distribution” and “The Exchange Offer.”

The Exchange Offer agent will hold all issued and outstanding shares of N&B common stock in trust for the benefit of stockholders that are receiving shares of N&B common stock in the Exchange Offer and the Clean-Up Spin-Off, pending the consummation of the Merger. Shares of N&B common stock will not be able to be traded during this period.



 

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In order to enable stockholders of DuPont to value their shares of N&B common stock in the Exchange Offer, DuPont intends to cause N&B to issue such number of shares of N&B common stock to DuPont prior to the Distribution such that the number of shares of N&B common stock is equal to the number of shares to be issued in the Share Issuance and the exchange ratio in the Merger is equal to approximately one. As such, the actual number of shares of N&B common stock distributed in the Distribution may differ from what is set forth above to the extent the number of fully diluted shares of IFF common stock (and by extension the Share Issuance) changes between the date hereof and the Distribution.

Step #5—The Mergers. In the Merger, Merger Sub I will be merged with and into N&B, with N&B surviving as a wholly owned subsidiary of IFF. In the Merger, each outstanding share of N&B common stock (except for shares of N&B common stock held by N&B as treasury stock or by DuPont, which will be canceled and cease to exist, and no consideration will be delivered in exchange therefor) will be converted into the right to receive a number of shares of IFF common stock such that immediately after the Merger such holders (or, if such holders exchange all of their shares of DuPont common stock in the Exchange Offer, also former holders) of DuPont’s common stock that received shares of N&B common stock in the Distribution will own approximately 55.4% of the outstanding shares of IFF common stock on a fully diluted basis and existing holders of IFF common stock immediately prior to the Merger will own approximately 44.6% of the outstanding shares of IFF common stock on a fully diluted basis, in each case, excluding any overlaps in the pre-Merger stockholder bases (calculated as further described in “The Merger Agreement—Merger Consideration”). No fewer than 30 days (or 15 days, in some circumstances) after the Merger (unless otherwise agreed by the parties), N&B will merge with and into Merger Sub II, with Merger Sub II surviving as a wholly owned subsidiary of IFF.

The foregoing are subject to certain conditions to their consummation. See “The Exchange Offer—Conditions to Consummation of the Exchange Offer,” “The Merger Agreement—Conditions to the Merger,” “The Separation Agreement—Conditions to the Distribution” and “The Separation Agreement—Conditions to the Internal Reorganization.”

The Separation and the Distribution

The Separation

DuPont will convey to N&B certain assets and liabilities constituting the N&B Business by first transferring the N&B Assets that are not already owned by members of the N&B Group to members of the N&B Group and having members of the N&B Group assume the N&B Liabilities that are not already directly owed by or otherwise directly the responsibility of members of the N&B Group, and transferring the Excluded Assets that are not already directly owned by members of the DuPont Group to members of the DuPont Group and having the DuPont Group assume the Excluded Liabilities that are not already directly owed by or otherwise the responsibility of members of the DuPont Group. Thereafter, DuPont will transfer all the equity interests in each member of the N&B Group (i.e., such subsidiary of DuPont holding assets and liabilities constituting a portion of the N&B Business) to N&B. In exchange, N&B will: (i) issue to DuPont shares of N&B common stock and (ii) pay to DuPont the Special Cash Payment.

The Distribution— Exchange Offer, Expected to be Followed by the Clean-Up Spin-Off

On the closing date of the Merger, DuPont will distribute 100% of the shares of N&B common stock to DuPont stockholders through the Exchange Offer and the expected Clean-Up Spin-Off. In the Exchange Offer, DuPont is offering its stockholders the option to exchange all or a portion of their shares of DuPont common stock for shares of N&B common stock. Following the Exchange Offer, the shares of N&B common stock remaining if the Exchange Offer is not fully subscribed because the number of shares of DuPont common stock that have been tendered and accepted results in fewer than all shares of N&B being exchanged, will be distributed in the Clean-



 

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Up Spin-Off on a pro rata basis to DuPont stockholders as of the record date other than in respect of any shares tendered and accepted in the Exchange Offer. For additional information regarding the Exchange Offer, see “The Exchange Offer.” DuPont currently expects the Exchange Offer will not be fully subscribed such that some portion of shares of N&B common stock will be distributed in the Clean-Up Spin-Off, although it is unable to predict how many. The record date for any Clean-Up Spin-Off will be announced by DuPont. Any DuPont stockholder who validly tenders (and does not properly withdraw) shares of DuPont common stock for shares of N&B common stock and whose shares are accepted in the Exchange Offer will waive their rights with respect to such shares to receive, and forfeit any rights to, shares of N&B common stock distributed on a pro rata basis to DuPont stockholders in the Clean-Up Spin-Off.

The Exchange Offer Agent will hold all issued and outstanding shares of N&B common stock in trust for the benefit of those stockholders receiving shares of N&B common stock in the Exchange Offer and the Clean-Up Spin-Off, pending the consummation of the Merger. Shares of N&B common stock will not be able to be traded during this period. At the effective time of the Merger, those shares of N&B common stock held in trust by the Exchange Offer Agent will automatically convert into the right to receive shares of IFF common stock, as further described below under “—Calculation of the Merger Consideration.”

The Merger

Under the Merger Agreement and in accordance with the DGCL, at the effective time of the Merger, Merger Sub I will merge with and into N&B. As a result of the Merger, the separate corporate existence of Merger Sub I will cease and N&B will continue as the surviving company and will succeed to and assume all the rights, powers and privileges and be subject to all of the obligations of Merger Sub I in accordance with the DGCL. As a result of the Merger, N&B will become a direct wholly owned subsidiary of IFF. At the effective time of the Merger, each share of N&B common stock issued and outstanding as of the effective time of the Merger (other than each share of N&B common stock held by N&B as treasury stock or by DuPont which, in each case, immediately prior to the effective time of the Merger will be canceled and will cease to exist, and no stock or other consideration will be issued or delivered in exchange therefor) will be automatically converted into the right to receive a number of shares of IFF common stock (or cash payment in lieu of fractional shares) based on the exchange ratio set forth in the Merger Agreement described below under “—Calculation of the Merger Consideration.”

Calculation of the Merger Consideration

The Merger Agreement provides that each share of N&B common stock issued and outstanding as of the effective time of the Merger (which calculation is described below) will automatically convert at the effective time of the Merger into the right to receive a number of shares of IFF common stock based on the exchange ratio set forth in the Merger Agreement. However, each share of N&B common stock that is held by N&B as treasury stock or by DuPont will be automatically cancelled at the effective time of the Merger. The exchange ratio will be determined prior to the closing of the Merger based on the number of outstanding shares of IFF common stock on a fully diluted, as-converted and as-exercised basis, on the one hand, and the number of shares of N&B common stock, on the other hand, in each case outstanding immediately prior to the effective time of the Merger. As described in the Merger Agreement, the exchange ratio equals the quotient of (i) the total shares of IFF common stock issued pursuant to the Share Issuance divided by (ii) the number of shares of N&B common stock issued and outstanding immediately prior to the effective time of the merger, subject to the adjustments set forth in the Merger Agreement. The total shares of IFF common stock to be issued pursuant to the Share Issuance will equal the number of outstanding shares of IFF common stock on a fully diluted, as-converted and as-exercised basis immediately prior to the effective time of the Merger multiplied by the quotient of 55.4 divided by 44.6.

No fractional shares of IFF common stock will be issued to any holder of N&B common stock pursuant to the Merger. All fractional shares of IFF common stock that a holder of shares of N&B common stock would



 

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otherwise be entitled to receive as a result of the Merger will be aggregated by the Exchange Agent (as defined in the Merger Agreement) and sold by the Exchange Agent, in the open market or otherwise no later than five business days after the date on which the Merger becomes effective. Any holder of shares of N&B common stock who would otherwise be entitled to receive a fraction of a share of IFF common stock (after aggregating all fractional shares issuable to such holder) will, in lieu of such fraction of a share, be paid in cash the dollar amount (rounded to the nearest whole cent), after deducting any required withholding taxes, brokerage charges, commissions and conveyances and similar taxes, on a pro rata basis, without interest, as soon as practicable.

Approval of the Transactions

On August 27, 2020, IFF shareholders voted at a special meeting to approve the Share Issuance. No vote by DuPont stockholders is required or is being asked for in connection with the Transactions. DuPont, as the sole stockholder of N&B, has previously approved the Merger.

Terms of the Exchange Offer

DuPont is offering holders of shares of DuPont common stock the opportunity to exchange their shares for shares of N&B common stock. You may tender all, some or none of your shares of DuPont common stock. This prospectus and related documents are being sent to persons who directly held shares of DuPont common stock on December 28, 2020 and brokers, banks and similar persons whose names or the names of whose nominees appear on DuPont’s stockholder list or, if applicable, who are listed as participants in a clearing agency’s security position listing for subsequent transmittal to beneficial owners of DuPont’s common stock.

DuPont common stock validly tendered and not properly withdrawn will be accepted for exchange at the exchange ratio determined as described under “The Exchange Offer—Terms of the Exchange Offer,” on the terms and conditions of the Exchange Offer and subject to the limitations described below, including the proration provisions.

DuPont will promptly return any shares of DuPont common stock that are not accepted for exchange following the expiration of the Exchange Offer and the determination of the final proration factor, if any, described below. After the expiration of the Exchange Offer, shares accepted by DuPont may not be withdrawn; provided, however, that such shares may be withdrawn at any time after the expiration of 40 business days from the commencement of the Exchange Offer if the Exchange Offer has not then been consummated.



 

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For the purposes of illustration, the table below indicates the number of shares of N&B common stock that you would receive per share of DuPont common stock you validly tender, calculated on the basis described under “The Exchange Offer—Terms of the Exchange Offer” and taking into account the upper limit, assuming a range of averages of the daily VWAP of DuPont common stock and IFF common stock on the Valuation Dates. The first row of the table below shows the indicative calculated per-share value of DuPont common stock, the indicative calculated per-share value of N&B common stock based on the per-share value of IFF common stock and the indicative exchange ratio that would have been in effect following the official close of trading on the NYSE on December 30, 2020 based on the daily VWAPs of DuPont common stock and IFF common stock on December 28, 2020, December 29, 2020 and December 30, 2020. The table also shows the effects of a 10% increase or decrease in either or both the calculated per-share value of DuPont common stock and the calculated per-share value of N&B common stock (i.e., IFF common stock) based on changes relative to the values as of December 30, 2020.

 

DuPont Common Stock   IFF Common Stock   Calculated
Per-Share
Value of
DuPont
Common
Stock(A)
   Calculated Per-
Share Value of
N&B Common
Stock (Before
The 7%
Discount)(B)
     Shares of N&B
Common Stock To
Be Received Per
Share of DuPont
Common Stock
Tendered (The
Exchange Ratio)(C)
  Calculated
Value
Ratio(D)

As of December 30, 2020

 

As of December 30, 2020

  $69.4548    $ 110.4393      0.6762x   1.075

Down 10%

 

Up 10%

  $62.5093    $ 121.4832      0.5533x   1.075

Down 10%

 

Unchanged

  $62.5093    $ 110.4393      0.6086x   1.075

Down 10%

 

Down 10%

  $62.5093    $ 99.3954      0.6762x   1.075

Unchanged

 

Up 10%

  $69.4548    $ 121.4832      0.6148x   1.075

Unchanged

 

Down 10%

  $69.4548    $ 99.3954      0.7180x1   1.028

Up 10%

 

Up 10%

  $76.4003    $ 121.4832      0.6762x   1.075

Up 10%

 

Unchanged

  $76.4003    $ 110.4393      0.7180x2   1.038

Up 10%

 

Down 10%

  $76.4003    $ 99.3954      0.7180x3   0.934

 

(A)

As of December 30, 2020, the calculated per-share value of DuPont common stock equals the simple arithmetic average of daily VWAPs on each of the three prior trading dates ($68.9922, $69.2459 and $70.1262).

(B)

As of December 30, 2020, the calculated per-share value of N&B common stock equals the simple arithmetic average of daily IFF VWAPs on each of the three prior trading dates ($109.3958, $110.7559 and $111.1663).

(C)

Calculated as A / (B*(1-7%)) or equal to the upper limit, whichever is less.

(D)

The Calculated Value Ratio equals (i) the calculated per-share value of N&B common stock (B) multiplied by the exchange ratio (C), divided by (ii) the calculated per-share value of DuPont common stock (A), rounded to the nearest three decimals.

1.

In this scenario, the upper limit of 0.7180 is in effect. Absent the upper limit, the exchange ratio would have been 0.7514 shares of N&B common stock per share of DuPont common stock validly tendered. DuPont would announce that the upper limit on the number of shares that can be received for each share of DuPont common stock tendered is in effect when DuPont announces the final exchange ratio no later than 11:59 p.m., New York City time, at the end of the second trading day prior to the expiration date of the Exchange Offer.

2.

In this scenario, the upper limit of 0.7180 is in effect. Absent the upper limit, the exchange ratio would have been 0.7439 shares of N&B common stock per share of DuPont common stock validly tendered. DuPont would announce that the upper limit on the number of shares that can be received for each share of DuPont common stock tendered is in effect when DuPont announces the final exchange ratio no later than 11:59 p.m., New York City time, at the end of the second trading day prior to the expiration date of the Exchange Offer.

3.

In this scenario, the upper limit of 0.7180 is in effect. Absent the upper limit, the exchange ratio would have been 0.8265 shares of N&B common stock per share of DuPont common stock validly tendered. DuPont



 

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  would announce that the upper limit on the number of shares that can be received for each share of DuPont common stock tendered is in effect when DuPont announces the final exchange ratio no later than 11:59 p.m., New York City time, at the end of the second trading day prior to the expiration date of the Exchange Offer.

For example, if the calculated per-share value of DuPont common stock was $71.33 (the highest closing price for DuPont common stock on the NYSE during the three-month period prior to commencement of the Exchange Offer) and the calculated per-share value of N&B common stock was $101.44 (the lowest closing price for IFF common stock on the NYSE during that three-month period), the value of N&B common stock, based on the IFF common stock price, received for shares of DuPont common stock accepted for exchange would be approximately $102.11 for each $100 of DuPont common stock accepted for exchange.

Extension; Termination

The Exchange Offer, and your withdrawal rights, will expire at one minute after 11:59 p.m., New York City time, on January 29, 2021, unless the Exchange Offer is extended or terminated. You must tender your shares of DuPont common stock prior to this time if you want to participate in the Exchange Offer. DuPont may extend, terminate or amend the Exchange Offer as described in this prospectus.

DuPont will issue a press release or other public announcement no later than 9:00 a.m., New York City time, on the next business day following any extension, amendment, non-acceptance or termination of the previously scheduled expiration date.

Conditions to Consummation of the Exchange Offer

DuPont’s obligation to exchange shares of N&B common stock for shares of DuPont common stock is subject to the conditions listed under “The Exchange Offer—Conditions to Consummation of the Exchange Offer,” including the satisfaction of conditions to the Transactions and other conditions. All conditions to the Exchange Offer must be satisfied or waived at or prior to the expiration date of the Exchange Offer, and DuPont will not be required to complete and consummate the Exchange Offer and may extend or terminate the Exchange Offer, if, at the scheduled expiration of the Exchange Offer:

 

   

any condition precedent to the consummation of the Transactions (other than the Exchange Offer) pursuant to the Merger Agreement and Separation Agreement has not been satisfied or waived (except for the conditions precedent that will be satisfied at the time of the consummation of the Transactions) or for any reason the Transactions (other than the Exchange Offer) cannot be consummated promptly after consummation of the Exchange Offer (see “The Merger Agreement—Conditions to the Merger” and “The Separation Agreement—Conditions to the Distribution”);

 

   

the shares of IFF common stock to be issued in the Merger have not been authorized for listing on the NYSE;

 

   

any proceeding for the purpose of suspending the effectiveness of any registration statement of which this document is a part has been initiated by the SEC and not concluded or withdrawn;

 

   

the Merger Agreement or the Separation Agreement has been terminated;

 

   

DuPont has not received the Tax Opinion from DuPont’s counsel, dated as of the closing date of the Merger, on certain aspects of the anticipated non-taxable nature of the Transactions; or

 

   

if certain other customary conditions have not been waived or satisfied.

For a description of the material conditions precedent to the Transactions, see “The Merger Agreement—Conditions to the Merger” and “The Separation Agreement—Conditions to the Distribution.”



 

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DuPont may waive any of the conditions to the Exchange Offer prior to the expiration of the Exchange Offer. N&B has no right to waive any of the conditions to the Exchange Offer. IFF has no right to waive any of the conditions to the Exchange Offer (other than certain conditions relating to the other transactions).

Proration; Tenders for Exchange by Holders of Fewer than 100 Shares of DuPont Common Stock

If, upon the expiration of the Exchange Offer, DuPont stockholders have validly tendered more shares of DuPont common stock than DuPont is able to accept for exchange (taking into account the exchange ratio and the total number of shares of N&B common stock being exchanged by DuPont in the Exchange Offer), DuPont will accept for exchange the shares of DuPont common stock validly tendered and not properly withdrawn by each tendering stockholder on a pro rata basis, based on the proportion that the total number of shares of DuPont common stock to be accepted bears to the total number of shares of DuPont common stock validly tendered and not properly withdrawn (rounded to the nearest whole number of shares of DuPont common stock, and subject to any adjustment necessary to ensure the exchange of all shares of N&B common stock being offered by DuPont in the Exchange Offer), except for tenders of odd-lots, as described below.

DuPont will announce the proration factor for the Exchange Offer at www.dupontexchangeoffer.com and separately by press release promptly after the expiration date of the Exchange Offer. Upon determining the number of shares of DuPont common stock validly tendered for exchange and not properly withdrawn, DuPont will announce the final results of the Exchange Offer, including the final proration factor for the Exchange Offer.

Beneficial holders (other than participants in the DuPont RSP) of less than 100 shares of DuPont common stock who validly tender all of their shares may elect not to be subject to proration by completing the section in the applicable letter of transmittal entitled “Odd-Lot Shares.” If your odd-lot shares are held by a broker for your account, you can contact the broker and request this preferential treatment. All of your odd-lot shares will be accepted for exchange without proration if DuPont completes the Exchange Offer.

While proration is possible, DuPont does not expect proration to occur because DuPont currently expects that the number of shares of DuPont common stock tendered in the Exchange Offer will result in fewer than all of the shares of N&B common stock being subscribed for, and that shares of N&B common stock will remain to be distributed following the completion of the Exchange Offer.

Fractional Shares

In the Merger, no fractional shares of IFF common stock will be delivered to holders of shares of N&B common stock. Instead, all fractional shares of IFF common stock that a holder of shares of N&B common stock would otherwise be entitled to receive as a result of the Merger will be aggregated by the Exchange Agent. The Exchange Agent will cause the whole shares obtained thereby to be sold on behalf of such holders of shares of N&B common stock that would otherwise be entitled to receive such fractional shares of IFF common stock in the Merger in the open market or otherwise, in each case at then prevailing market prices, and in no case later than five business days after the Merger. The Exchange Agent will make available the net proceeds thereof, after deducting any required withholding taxes and brokerage charges, commissions and conveyance and similar taxes, on a pro rata basis, without interest, as soon as practicable to the holders of N&B common stock that would otherwise be entitled to receive such fractional shares of IFF common stock in the Merger.

Procedures for Tendering

For you to validly tender your shares of DuPont common stock pursuant to the Exchange Offer, prior to the expiration of the Exchange Offer:

 

   

If you hold shares of DuPont common stock through the DRS, you must deliver to the Exchange Offer Agent at an address listed on the letter of transmittal for DuPont common stock you will receive, a



 

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properly completed and duly executed letter of transmittal, along with any required signature guarantees and any other required documents.

 

   

If you hold shares of DuPont common stock through a broker, you should receive instructions from your broker on how to participate in the Exchange Offer. In this situation, do not complete a letter of transmittal to tender your DuPont common stock. Please contact your broker directly if you have not yet received instructions. Some financial institutions may also effect tenders by book-entry transfer through The Depository Trust Company.

 

   

If you participate in the DuPont RSP, you will receive instructions from Bank of America, N.A. via letter or email informing you how to make an election and the deadline for making an election. In this situation, do not complete a letter of transmittal to tender your shares of DuPont common stock.

Delivery of N&B Common Stock

On or prior to the time of consummation of the Exchange Offer, and prior to the Merger, DuPont will irrevocably deliver to the Exchange Offer Agent a book-entry authorization representing all of the shares of N&B common stock outstanding owned by it, with irrevocable instructions to hold the shares of N&B common stock in trust for DuPont stockholders that are receiving shares of N&B common stock in the Exchange Offer and the Clean-Up Spin-Off. Immediately prior to the Merger, by virtue of the delivery of such shares and the satisfaction prior to the Merger of the conditions to the Distribution and DuPont’s acceptance of all shares tendered in the Exchange Offer, those entitled to shares of N&B common stock in the Exchange Offer or the Clean-Up Spin-Off will be considered the beneficial owners of such shares. The Exchange Offer Agent will continue to hold the shares of N&B common stock in trust for the benefit of those N&B stockholders pending the consummation of the Merger. Shares of N&B common stock will not be able to be traded during this period. Prior to the effective time of the Merger, IFF will deposit with the Exchange Agent for the benefit of persons who received shares of N&B common stock in the Exchange Offer and the Clean-Up Spin-Off evidence in book-entry form representing shares of IFF common stock issuable in the Merger. At the effective time of the Merger, those shares of N&B common stock held in trust by the Exchange Offer Agent will automatically convert into the right to receive shares of IFF common stock. Following the effective time of the Merger, once the final calculation of the number of shares of N&B common stock received by each N&B stockholder in the Exchange Offer and the Clean-Up Spin-Off is determined, the Exchange Agent will deliver the appropriate number of shares of IFF common stock based on the terms of the Merger Agreement and the procedures established by the Exchange Agent.

See “The Exchange Offer—Terms of the Exchange Offer—Exchange of Shares of DuPont Common Stock.”

Withdrawal Rights

Shares of DuPont common stock validly tendered pursuant to the Exchange Offer may be withdrawn at any time prior to one minute after 11:59 p.m., New York City time, on the expiration date by following the procedures described herein. If you change your mind again, you may re-tender your DuPont common stock by again following the Exchange Offer procedures prior to the expiration of the Exchange Offer.

No Appraisal Rights

No appraisal rights are available to holders of DuPont common stock in connection with the Exchange Offer or any pro rata distribution of shares of N&B common stock.

Distribution of N&B Common Stock Remaining After the Exchange Offer

DuPont currently expects that the number of shares of DuPont common stock tendered in the Exchange Offer will result in fewer than all of the shares of N&B common stock being exchanged, and that shares of N&B common stock will remain to be distributed following the completion of the Exchange Offer.



 

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All shares of N&B common stock owned by DuPont that are not exchanged in the Exchange Offer will be distributed in a pro rata distribution to holders of DuPont common stock who hold shares of DuPont common stock on the record date and have not waived their right to receive shares of N&B common stock in the Exchange Offer, referred to throughout this prospectus as the Clean-Up Spin-Off. The record date for the pro rata distribution will be announced by DuPont. Any DuPont stockholder who validly tenders (and does not properly withdraw) shares of DuPont common stock for shares of N&B common stock and whose shares are accepted in the Exchange Offer will waive their rights with respect to such shares to receive, and forfeit any rights to, shares of N&B common stock distributed on a pro rata basis to DuPont stockholders in the Clean-Up Spin-Off. Such stockholders will have waived their rights to shares of N&B common stock in the Clean-Up Spin-Off notwithstanding the fact they held shares of DuPont common stock on the record date. As such, DuPont stockholders whose shares are validly tendered, and accepted, in the Exchange Offer, will not receive shares of N&B common stock in the Clean-Up Spin-Off in respect of such shares (but may with respect to any other shares that are not validly tendered and accepted).

On or prior to the time of consummation of the Exchange Offer, and prior to the Merger, DuPont will irrevocably deliver to the Exchange Offer Agent a book-entry authorization representing all of the shares of N&B common stock outstanding owned by it, with irrevocable instructions to hold the shares of N&B common stock in trust for DuPont stockholders that are receiving shares of N&B common stock in the Exchange Offer and the Clean-Up Spin-Off. The Exchange Offer Agent will continue to hold the shares of N&B common stock in trust for the benefit of those N&B stockholders pending the consummation of the Merger. Shares of N&B common stock will not be able to be traded during this period. Prior to the effective time of the Merger, IFF will deposit with the Exchange Agent for the benefit of persons who received shares of N&B common stock in the Exchange Offer and the Clean-Up Spin-Off evidence in book-entry form representing shares of IFF common stock issuable in the Merger. Following the effective time of the Merger, once the final calculation of the number of shares of N&B common stock received by each N&B stockholder in the Exchange Offer and the Clean-Up Spin-Off is determined, the Exchange Agent will deliver the appropriate number of shares of IFF common stock based on the terms of the Merger Agreement and the procedures established by the Exchange Agent. See “The Exchange Offer—Terms of the Exchange Offer—Exchange of Shares of DuPont Common Stock.” The Exchange Offer is subject to the conditions to the Exchange Offer as further described in “The Exchange Offer—Conditions to Consummation of the Exchange Offer” of this prospectus. In addition to the conditions applicable to the Exchange Offer, the Distribution is subject to certain conditions set forth in the Separation Agreement and the Merger is subject to certain conditions set forth in the Merger Agreement. See “The Merger Agreement—Conditions to the Merger” and “The Separation Agreement—Conditions to the Distribution.”

Legal Limitations; Certain Matters Relating to Non-U.S. Jurisdictions

This prospectus is not an offer to buy, sell or exchange and it is not a solicitation of an offer to buy or sell any shares of N&B common stock, shares of DuPont common stock or shares of IFF common stock in any jurisdiction in which the offer, sale or exchange is not permitted. After the consummation of the Exchange Offer and prior to the Merger, it will not be possible to trade the N&B common stock. Countries outside the United States generally have their own legal requirements that govern securities offerings made to persons resident in those countries and often impose stringent requirements about the form and content of offers made to the general public. None of DuPont, IFF or N&B has taken any action under non-U.S. regulations to facilitate a public offer to exchange the shares of DuPont common stock, IFF common stock or N&B common stock outside the United States. Accordingly, the ability of any non-U.S. person to tender shares of DuPont common stock in the Exchange Offer will depend on whether there is an exemption available under the laws of such person’s home country that would permit the person to participate in the Exchange Offer without the need for DuPont, IFF or N&B to take any action to facilitate a public offering in that country or otherwise. For example, some countries exempt transactions from the rules governing public offerings if they involve persons who meet certain eligibility requirements relating to their status as sophisticated or professional investors.



 

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Non-U.S. stockholders should consult their advisors in considering whether they may participate in the Exchange Offer in accordance with the laws of their home countries and, if they do participate, whether there are any restrictions or limitations on transactions in the shares of DuPont common stock, IFF common stock or N&B common stock that may apply in their home countries. None of DuPont, IFF or N&B can provide any assurance about whether such limitations may exist. See “The Exchange Offer—Certain Matters Relating to Non-U.S. Jurisdictions” for additional information about limitations on the Exchange Offer outside the United States.

Risk Factors

In deciding whether to tender your shares of DuPont common stock in the Exchange Offer, you should carefully consider the matters described in the section “Risk Factors,” as well as other information included in this prospectus and the other documents to which you have been referred.

Debt Financing

In connection with the Transactions, N&B has engaged in the following financing activities:

 

   

On December 15, 2019, N&B and IFF entered into a commitment letter (as it may be amended, restated, amended and restated, supplemented or otherwise modified from time to time, the “Commitment Letter”), under which Morgan Stanley Senior Funding, Inc., Credit Suisse Loan Funding LLC, Credit Suisse AG, Cayman Islands Branch, and certain other financial institutions (collectively, and together with their respective affiliates, the “Commitment Parties”) committed to provide $7.5 billion in an aggregate principal amount of senior unsecured bridge term loans, the availability of which is subject to reduction upon the consummation of the Permanent Financing (as defined below) pursuant to the terms set forth in the Commitment Letter (the “Bridge Facility”);

 

   

On January 17, 2020, N&B entered into a term loan credit agreement providing for unsecured term loan facilities in an aggregate principal amount of up to $1.25 billion (the “Term Loan Facility”), which reduced the commitments under the Commitment Letter by a corresponding amount to $6.25 billion. The term loan agreement was amended pursuant to that certain Amendment No. 1 to the Credit Agreement, dated as of August 25, 2020, among N&B, the lenders party thereto and Morgan Stanley Senior Funding, Inc., as administrative agent; and

 

   

On September 16, 2020, pursuant to the Indenture, N&B issued $6.25 billion in aggregate principal amount of the Notes, which reduced the remaining commitments under the Commitment Letter in their entirety. The Commitment Letter was also terminated as of such date. The Notes are described further in the section entitled “Debt Financing—N&B Notes.”

Following the consummation of the Transactions, all obligations of N&B with respect to the Term Loan Facility and the Notes will be guaranteed by IFF or at the election of N&B and IFF, IFF may assume these N&B obligations, which assumption is expected to occur after the Second Merger. In addition, following the Merger, by virtue of the fact N&B will be a wholly owned subsidiary of IFF, the consolidated indebtedness of IFF and its subsidiaries will include the indebtedness incurred by N&B in the debt financings completed prior to the Distribution (See “Debt Financing”).

Risk Factors

There are a number of risks that you should understand before making an investment decision regarding the Transactions. These risks are discussed more fully in the section entitled “Risk Factors” following this summary. If any of these risks actually occur, IFF’s, the N&B Business’s or the combined company’s business, financial



 

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condition or results of operations would likely be materially and adversely affected. These risks include, but are not limited to, the following:

 

 

The calculation of merger consideration will not be adjusted if there is a change in the value of the N&B Business or its assets or the value of IFF before the Transactions are completed.

 

 

The Transactions may not be completed on the terms or timeline currently contemplated, or at all, as IFF and DuPont may be unable to satisfy the conditions or obtain the approvals required to complete the Transactions or such approvals may contain material restrictions or conditions, and failure to complete the Transactions could adversely affect the market price of IFF common stock as well as its business, financial condition and results of operations.

 

 

If completed, the Transactions may not be successful or achieve their anticipated benefits.

 

 

Investors holding shares of IFF common stock immediately prior to the completion of the Transactions will, in the aggregate, have a significantly reduced ownership and voting interest in IFF after the Transactions and will exercise less influence over management.

 

 

The Merger Agreement contains provisions that may discourage other companies from trying to acquire IFF.

 

 

The fairness opinions obtained by the IFF board of directors from Greenhill and Morgan Stanley, respectively, will not reflect changes, circumstances, developments or events that may have occurred or may occur after the date of such opinions

 

 

IFF’s estimates and judgments related to the acquisition accounting models used to record the purchase price allocation may be inaccurate.

 

 

IFF may be required to recognize impairment charges for goodwill and other intangible assets.

 

 

IFF is required to abide by potentially significant restrictions which could limit IFF’s ability to undertake certain corporate actions (such as the issuance of IFF common stock or the undertaking of a merger or consolidation) that otherwise could be advantageous.

 

 

The Distribution could result in significant tax liability, and IFF may be obligated to indemnify DuPont for any such tax liability imposed on DuPont.

 

 

If the Mergers do not qualify as a tax-free reorganization under Section 368 of the Code, the stockholders of DuPont may have significant tax liability.

 

 

IFF and the N&B Business may have difficulty attracting, motivating and retaining executives and other employees in light of the Transactions, and significant shortfalls in recruitment or retention could adversely affect the combined company’s ability to compete and achieve its strategic goals.

 

 

IFF may waive one or more of the conditions to the consummation of the Transactions without re-soliciting shareholder approval.

 

 

IFF, by acquiring N&B in the Merger, will, on a consolidated basis, assume and be responsible for all N&B Liabilities following the closing of the Transactions, and is acquiring the N&B Assets on an as is, where is basis and with all faults, in each case, notwithstanding any breach of any representation or warranty of the Merger Agreement.

 

 

Tendering DuPont stockholders may receive a reduced premium or may not receive any premium in the Exchange Offer.

 

 

The trading prices of IFF common stock may not be an appropriate proxy for the prices of N&B common stock.

 

 

DuPont stockholders’ investment will be subject to different risks after the Exchange Offer regardless of whether they elect to participate in the Exchange Offer.



 

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Sales of IFF common stock after the Transactions may negatively affect the market price of IFF common stock.

 

 

The historical financial information of the N&B Business may not be representative of its results or financial condition if it had been operated independently of DuPont and, as a result, may not be a reliable indicator of its future results.

 

 

The unaudited condensed combined pro forma financial information of IFF and the N&B Business is not intended to reflect what actual results of operations and financial condition would have been had IFF and the N&B Business been a combined company for the periods presented, and therefore these results may not be indicative of the combined company’s future operating performance.

 

 

IFF may be unable to provide (or obtain from third-parties) the same types and level of services to the N&B Business that historically have been provided by DuPont, or may be unable to provide (or obtain) them at the same cost, and the combined company’s business, financial condition and results of operations may be adversely affected following the Transactions if IFF cannot negotiate terms that are as favorable as those DuPont has received when IFF replaces contracts after the closing of the Transactions, or if there are adverse changes in relationships with third parties and pre-existing customers of IFF and the N&B Business.

 

 

The integration of the N&B Business with IFF may present significant challenges, and the combined company may not realize anticipated synergies and other benefits of the Transaction.

 

 

The combined company will have a substantial amount of indebtedness following the Transactions, which could materially adversely affect its financial condition.

 

 

IFF may not realize all the benefits anticipated from the Frutarom acquisition, including expected cost savings and increased efficiencies, which could adversely affect the combined company’s business.

 

 

A significant portion of the combined company’s sales are expected to be generated from a limited number of large multi-national customers, which are currently under competitive pressures that may affect the demand for the combined company’s products and profitability.

 

 

Natural disasters, public health crises (such as COVID-19), international conflicts, terrorist acts, labor strikes, political crisis, accidents and other events could adversely affect the combined company’s business and financial results by disrupting development, manufacturing, distribution or sale of the combined company’s products.

 

 

The novel coronavirus (COVID-19) pandemic, and measures taken in response to it, may adversely impact the operations, financial condition, results of operations and cash flows of the N&B Business, IFF and/or the combined company. The extent of such impact, which may be material, depends on future developments, which are highly uncertain and cannot be predicted.

 

 

Volatility and increases in the price of raw materials, energy and transportation, including due to climate change, could harm the combined company’s profits, and a disruption in the combined company’s supply chain, including the inability to obtain ingredients and raw materials from third parties, could adversely affect the combined company’s business and financial results.

 

 

If the combined company is unable to comply with regulatory requirements and industry standards, including those regarding product safety, quality, efficacy, sustainability and environmental protection, the combined company could incur significant costs and suffer reputational harm which could adversely affect results of operations.

 

 

IFF and the N&B Business have investments in and continue to expand their business into emerging markets, which exposes the combined company to certain risks.

 

 

The combined company could be adversely affected by violations of the U.S. Foreign Corrupt Practices Act or similar U.S. or foreign anti-bribery and anti-corruption laws and regulations in the jurisdictions in which it operates.



 

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The combined company’s results of operations may be negatively impacted by the outcome of uncertainties related to litigation.

Opinions of IFF’s Financial Advisors

Opinion of Greenhill & Co., LLC

IFF engaged Greenhill to provide certain financial advisory services to the IFF board of directors in connection with the Transactions. At the December 15, 2019 meeting of the IFF board of directors held to evaluate the Transactions, Greenhill rendered an oral opinion, confirmed by delivery of a written opinion dated as of December 15, 2019, to the effect that, as of such date and subject to and based on the various assumptions made, procedures followed, matters considered and qualifications and limitations of the review set forth therein, the exchange ratio set forth in the Merger Agreement was fair, from a financial point of view, to holders of IFF common stock.

The full text of the written opinion of Greenhill, dated December 15, 2019, which sets forth the assumptions made, procedures followed, matters considered and qualifications and limitations of the review undertaken in connection with the opinion, is attached as Annex A and is incorporated herein by reference. The summary of the Greenhill opinion provided in this prospectus is qualified in its entirety by reference to the full text of the opinion. Shareholders of IFF are encouraged to read Greenhill’s opinion and this section carefully and in their entirety. Greenhill provided advisory services and its opinion for the information and assistance of the IFF board of directors in connection with its consideration of the Transactions. Greenhill’s opinion is not a recommendation as to how any holder of shares of IFF common stock should vote with respect to matters related to the Transactions, or any other matter.

Opinion of Morgan Stanley & Co. LLC

Morgan Stanley was retained by the IFF board of directors to act as its financial advisor and to provide a fairness opinion in connection with the Transactions, including the Merger. At the meeting of IFF’s board of directors on December 15, 2019, Morgan Stanley rendered its oral opinion, which was subsequently confirmed in writing on December 15, 2019, to the effect that, as of such date, and based upon and subject to the assumptions made, procedures followed, matters considered, and qualifications and limitations on the scope of review undertaken by Morgan Stanley as set forth in Morgan Stanley’s written opinion, the exchange ratio pursuant to the Merger Agreement was fair from a financial point of view to IFF.

The full text of the written opinion of Morgan Stanley, dated December 15, 2019, is attached as Annex B and incorporated by reference into this prospectus in its entirety. The opinion sets forth, among other things, the assumptions made, procedures followed, matters considered and qualifications and limitations on the scope of the review undertaken by Morgan Stanley in rendering its opinion. Shareholders of IFF are urged to, and should, read the opinion carefully and in its entirety. Morgan Stanley’s opinion is directed to the IFF board of directors and addresses only the fairness, from a financial point of view, of the exchange ratio set forth in the Merger Agreement to IFF. Morgan Stanley’s opinion did not address any other aspect of the transactions contemplated by the Merger Agreement or the Separation Agreement and did not address any other aspects or implications of the Transactions, including the price at which IFF common stock will trade following the consummation of the Transactions or at any time, or the fairness of the amount or nature of the compensation to any of the N&B Business’ or IFF’s officers, directors or employees, or any class of such persons, whether relative to the exchange ratio set forth in the Merger Agreement or otherwise.

Board of Directors and Management of IFF Following the Transactions

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2022, when the size of the board will be reduced to 12 directors and the nominees to be voted on shall be DuPont’s six designated directors (or any replacement thereof) and six of IFF’s current directors (or any replacements thereof). Current DuPont Executive Chairman and CEO Ed Breen will join the board of IFF at the effective time of the Merger as a DuPont appointee and will serve as Lead Independent Director upon the later of June 1, 2021 and the closing date of the Merger. On May 11, 2020, IFF and DuPont announced two additional DuPont director designees who are expected to join the board of the combined company at the effective time of the Merger, Matthias Heinzel, N&B President, and Carol A. (John) Davidson, a CPA with more than 30 years of leadership experience across multiple industries.

Andreas Fibig will continue to serve as Chairman and CEO of IFF. The Executive Committee of the combined company will also include: Rustom Jilla, Executive Vice President, Chief Financial Officer; Kathy Fortmann, President, Taste, Food & Beverage; Nicolas Mirzayantz, President, Scent; Simon Herriott, President, Health & Biosciences; Angela Strzelecki, President, Pharma Solutions; Greg Yep, Executive Vice President, Chief Research & Development and Global Integrated Solutions Officer; Greg Soutendijk, Senior Vice President, Commercial Excellence; Susana Suarez Gonzalez, Executive Vice President, Chief Human Resources and Diversity & Inclusion Officer; Francisco Fortanet, Executive Vice President, Global Operations Officer; Vic Verma, Executive Vice President, Chief Information Officer; Michael DeVeau, Senior Vice President, Chief Investor Relations & Communications Officer; Etienne Laurent, Senior Vice President, Finance & Corporate Strategy; Jennifer Johnson, Executive Vice President, General Counsel; and Anne Chwat, IFF’s current Executive Vice President, General Counsel and Corporate Secretary, who has agreed to remain with IFF for a period following the consummation of the Transactions to work with Ms. Johnson to ensure a smooth integration and transition. IFF and N&B have formed an Integration Office, comprised of leaders from both companies, to manage the integration of the companies.

Interests of Certain Persons in the Transactions

As more fully described in “The Transactions—Interests of DuPont’s and N&B’s Directors and Executive Officers in the Transactions” beginning on page 261, certain existing DuPont directors and executive officers will or may serve as directors of IFF upon consummation of the Transactions, and one existing DuPont executive officer is party to certain retention and severance arrangements that provide him with financial interests in the Transactions that may be different from, or in addition to, the interests of DuPont’s stockholders generally. The members of the DuPont board of directors were aware of and considered these interests, among other matters, in reaching the determination to approve the terms of the Transactions.

Although the closing date of the Merger will result in a change in control of IFF for purposes of certain compensation and benefits plans, with the exception of an automatic acceleration of the aggregate vested balance held in the Deferred Compensation Plan (defined below) for Marcello Bottoli and Michael Ducker, directors who participate in that plan and had not elected to defer accelerated payment upon a change in control, no payments or benefits become due to directors or executive officers upon the closing date of the Merger. Instead, upon a qualifying termination of employment within 24 months following the closing date of the Merger, IFF’s executive officers will have the right to receive potential enhanced severance payments and potential accelerated vesting of certain outstanding LTIP and equity awards, and IFF’s non-employee directors will have the right to receive potential accelerated vesting of certain IFF RSUs. The directors and executive officers of IFF otherwise will receive no extra or special benefit that is not shared on a pro rata basis by all other IFF shareholders in connection with the Transactions. As with all holders of shares of DuPont common stock, if a director or officer of IFF owns shares of DuPont common stock, directly or indirectly, such person may participate in the Exchange Offer on the same terms as other holders of shares of DuPont common stock. See “The Transactions—Interests of IFF’s Directors and Executive Officers in the Transactions.”



 

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Treatment of DuPont Equity Awards

As more fully described in “The Transactions—Effects of the Distribution and the Merger on DuPont Equity Awards,” certain employees of the N&B Business hold DuPont Equity Awards. Upon consummation of the Merger, each DuPont Equity Award then held by an N&B Employee will be converted into an IFF Equity Award in a manner intended to preserve its intrinsic value with terms and conditions otherwise generally the same as those to which the underlying DuPont Equity Award was subject immediately before the Merger, provided that DuPont PSU Awards will be converted into IFF RSUs with the performance criteria under the DuPont PSU Award deemed satisfied at the actual level of performance immediately prior to the closing date of the Merger. Certain current and former employees of DuPont who will not become N&B Employees also hold DuPont Equity Awards. Such awards may be adjusted by reason of the proposed Transactions if determined by the DuPont board of directors to be necessary to preserve the intrinsic value of the awards.

IFF’s Shareholders Meeting

Under the terms of the Merger Agreement, IFF agreed to take all lawful action to call a meeting of its shareholders for the purpose of voting upon the issuance of shares of IFF’s common stock in the Merger and related matters as promptly as practicable following the date on which the SEC has cleared IFF’s proxy statement. IFF asked its shareholders to vote on the Share Issuance at the special meeting of IFF shareholders by delivering IFF’s proxy statement to its shareholders in accordance with applicable law and its organizational documents. On August 27, 2020, IFF shareholders approved the Share Issuance.

No vote of DuPont stockholders is required or being sought in connection with the Transactions.

Accounting Treatment and Considerations

Accounting Standards Codification (“ASC”) 805, Business Combinations, requires the use of the acquisition method of accounting for business combinations. In applying the acquisition method, it is necessary to identify the accounting acquirer. In a business combination effected primarily through an exchange of equity interests, such as the Merger, the entity that issues its equity interests (IFF in this case) is usually the acquiring entity. However, in identifying the acquiring entity in a combination effected through an exchange of equity interests, all pertinent facts and circumstances must be considered, including, but not limited to, the following:

 

   

The relative voting interests of significant stockholders and the ability of any of those stockholders to exercise control over the consolidated entity after the Transactions. It was determined that upon the combination pre-Merger holders of shares of N&B common stock will own 55.4 percent of the outstanding shares of IFF common stock, on a fully diluted basis. In this case, it was also determined that the stockholder bases of both entities are dispersed such that no single stockholder or group of related stockholders would control the entity after the Transactions.

 

   

The composition of the governing body of IFF after the Transactions. The board of directors of the combined company immediately following the Merger is expected to consist of seven members from the board of directors of IFF immediately prior to the consummation of the Merger and six DuPont director appointees. At the 2022 IFF annual meeting, the composition of the board will revert to six IFF and six DuPont designated directors, and thereafter, directors will be elected annually according to a typical nomination and election process. However, given IFF has majority in the governing body until the 2022 IFF annual meeting, IFF has influence over the governing body for at least a period of time.

 

   

The composition of the senior management of IFF after the Transactions. Effective as of the closing of the Merger, Andreas Fibig shall continue as the Chairman and Chief Executive Officer of the combined company and Rustom Jilla shall continue as the Chief Financial Officer of the combined company. The Executive Committee of the combined company is expected to also include the individuals listed in the



 

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section entitled “Information on IFF—Directors and Officers of IFF Before and After the Transactions.” IFF and N&B have formed an Integration Office, comprised of leaders from both companies, to manage the integration of the companies.

After considering all pertinent facts, reviewing the criteria outlined in ASC 805 and conducting the relevant analysis, IFF has concluded that it is the accounting acquirer in the Merger. IFF’s conclusion is based primarily upon the following facts: (1) seven of thirteen members of the board of directors positions in the combined entity will be determined by IFF, (2) the current Chief Executive Officer and the current Chief Financial Officer of IFF as noted above will continue as Chief Executive Officer and Chief Financial Officer of the combined company after the Merger and (3) IFF is issuing its equity interests as consideration for the Merger. The above facts are deemed to outweigh the fact that the pre-Merger holders of shares of N&B common stock that receive shares of IFF common stock in the Merger will in the aggregate own a majority of IFF common stock on a fully diluted bases and associated voting rights after the Merger. As a result of the identification of IFF as the acquirer, IFF will apply the acquisition method of accounting to the assets acquired and liabilities assumed of the N&B Business upon consummation of the Merger. Upon consummation of the Merger, the historical pre-acquisition financial statements will reflect only the operations and financial condition of IFF.

U.S. Federal Income Tax Consequences of the Transactions

The completion of the Internal Reorganization, Distribution, and Merger is conditioned upon the receipt by DuPont of the Tax Opinion to the effect that, among other things, for U.S. federal income tax purposes, (a) the Parent Contribution, Special Cash Payment and Distribution, taken together, will qualify as a reorganization under Sections 355(a), 361 and 368(a)(1)(D) of the Code and (b) the Merger and the Second Merger will be treated as an integrated plan described in Rev. Rul. 2001-46, 2001-2 C.B. 321 and qualify as a tax-free reorganization within the meaning of Section 368(a) of the Code. Provided that the Parent Contribution, the Special Cash Payment and the Distribution so qualify, DuPont’s stockholders will not recognize any taxable income, gain or loss as a result of the receipt of N&B shares in the Distribution for U.S. federal income tax purposes and DuPont will not recognize any taxable income gain or loss as a result of the Parent Contribution, receipt of the Special Cash Payment, or the Distribution, provided DuPont uses the proceeds of the Special Cash Payment for certain permitted purposes, including repayment of certain debt, distributions to stockholders, and repurchases of DuPont shares. Provided that the Mergers so qualify, DuPont and its stockholders will not recognize any taxable income, gain or loss as a result of the Mergers for U.S. federal income tax purposes (except for any gain or loss attributable to the receipt of cash in lieu of fractional shares of IFF common stock).

Please see “Risk Factors—Risks Related to the Transactions—The Distribution could result in significant tax liability, and IFF may be obligated to indemnify DuPont for any such tax liability imposed on DuPont,” “Risk Factors—Risks Related to the Transactions—If the Mergers do not qualify as a tax-free reorganization under Section 368 of the Code, the stockholders of DuPont may have significant tax liability,” and “U.S. Federal Income Tax Consequences of the Transactions” for more information regarding the Tax Opinion and the potential tax consequences of the Transactions. Holders of DuPont common stock should consult their tax advisor as to the particular tax consequences of the Transactions.

Regulatory Approvals

Under the HSR Act, and the rules and regulations promulgated thereunder by the U.S. Federal Trade Commission (the “FTC”), the Merger cannot be consummated unless certain information has been furnished to the FTC and the Antitrust Division of the U.S. Department of Justice (the “DOJ”), and specified waiting period requirements have been satisfied. Each of IFF and N&B filed a Pre-Merger Notification and Report Form pursuant to the HSR Act with the DOJ and the FTC on February 3, 2020. The waiting period under the HSR Act expired at 11:59 p.m. (Eastern Time in the United States) on March 4, 2020.



 

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There can be no assurance that a challenge to the Merger on antitrust or other grounds will not be made or, if such a challenge is made, that it would not be successful. DuPont and IFF have agreed to use their respective reasonable best efforts to obtain clearances and/or approvals.

Under the Merger Agreement, the Merger is conditioned upon (i) obtaining any applicable consents, authorizations, orders, or approvals required under the competition or antitrust laws of Brazil, China, the European Union, Mexico, Russia, South Africa, Turkey, Ukraine and Serbia; and (ii) the absence of any law or binding governmental order or taking of any other action prohibiting, enjoining, restraining or otherwise making illegal the Separation, the Distribution or the Merger by a court of competent jurisdiction or other governmental authority in Brazil, China, the European Union, Mexico, Russia, South Africa, Turkey, Ukraine and Serbia (DuPont and IFF shall also consider the inclusion of any additional jurisdictions in good faith).

IFF and the N&B Business derive revenues in various non-U.S. jurisdictions where consents, authorizations, orders, or approvals under the applicable competition, antitrust or similar laws may be required or advisable. In addition to those countries described above where obtaining any applicable consents, authorizations, orders, or approvals is required as a condition to the consummation of the Merger, DuPont and IFF sought and received clearance from the Competition Commission of India, the Korea Fair Trade Commission and the Superintendence of Industry and Commerce in Colombia.

With respect to the jurisdictions the approval of which were conditions to the Merger, the parties previously filed the required notification forms with and have also received clearance with respect to the Merger from each of the Commission for the Protection of Competition in Serbia, the Administrative Council for Economic Defense in Brazil, the Anti-Monopoly Committee of Ukraine, the Federal Antimonopoly Service of Russia, the Turkish Competition Board, the Competition Commission of South Africa, the Federal Economic Competition Commission of Mexico and the Chinese State Administration for Market Regulation. With respect to the European Union, on December 7, 2020, DuPont and IFF received unconditional clearance with respect to the Merger from the European Commission.

The Merger Agreement provides that each party to the Merger Agreement will use its reasonable best efforts to take, or cause to be taken, all actions, and to do, or cause to be done, and to assist and cooperate with the other parties in doing, all things necessary, proper or advisable to obtain all actions or nonactions, waivers, consents and approvals from governmental authorities (including any required action or non-action under antitrust and competition laws) that may be or become necessary to consummate the Merger prior to the effective time of the Merger. These obligations are described in further detail in the section entitled “The Merger Agreement—Regulatory Matters” on page 282.



 

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SUMMARY HISTORICAL AND PRO FORMA FINANCIAL DATA

The following summary historical combined financial data of the N&B Business and summary historical consolidated financial data of DuPont and IFF are being provided to help you in your analysis of the financial aspects of the Transactions. You should read this information in conjunction with the financial information included elsewhere and incorporated by reference into this document. See “Where You Can Find More Information; Incorporation by Reference,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations for the N&B Business,” “Information on the N&B Business,” “Information on DuPont,” “Information on IFF,” and “Selected Financial Statement Data.”

Summary Historical Combined Financial Data of the N&B Business

The following data of N&B as of December 31, 2019 and December 31, 2018, and for the year ended December 31, 2019, the year ended December 31, 2018, the period September 1 through December 31, 2017, and the period January 1 through August 31, 2017, have been derived from the audited combined financial statements of N&B included elsewhere in this document. The following selected historical combined condensed financial statement data as of September 30, 2020, and for the nine months ended September 30, 2020 and September 30, 2019 have been derived from the interim unaudited combined condensed financial statements of N&B included elsewhere in this document. The data below as of December 31, 2017 has been derived from the unaudited combined balance sheet of N&B not included or incorporated by reference in this prospectus. This information is only a summary and should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations for the N&B Business” and the combined financial statements of N&B and the notes thereto included elsewhere in this document.

 

    Successor           Predecessor  

(In millions)

  For the
Nine Months
Ended
September 30,
2020
    For the
Nine Months
Ended
September 30,
2019
    For the Year
Ended
December 31,
2019
    For the Year
Ended
December 31,
2018
    For the
Period
September 1
through
December 31,
2017
          For the
Period
January 1
through
August 31,
2017
 

Statement of Operations1

               

Net sales

  $ 4,557     $   4,618     $ 6,076     $ 6,216     $ 1,885         $   2,810  

Net (loss) income

  $ (449   $ (481   $ (471   $ 394     $ 197         $ 285  

Net income attributable to noncontrolling interests

  $ —       $ —       $ 1     $ 1     $ 1         $ 5  

Net (loss) income attributable to N&B

  $ (449   $ (481   $ (472   $ 393     $ 196         $ 280  

Period-end Financial Position

               

Total assets

  $ 27,029       $ 21,539     $ 22,612     $ 23,360        

Long-term debt2

  $ 6,192       $ —       $ —       $ —          

 

1.

The periods presented during the year ended December 31, 2017 reflect results related to Historical EID (as defined below under “Information on DuPont”) businesses for the entire year and includes the results of the Historical Dow (as defined below under “Information on DuPont”) businesses for the period beginning on and after September 1, 2017, and the H&N Business (as defined below under “Management’s Discussion and Analysis of Financial Condition and Results of Operations for the N&B Business”) for the period beginning on and after November 1, 2017.

2.

Long-term debt as of September 30, 2020 includes the proceeds from the Notes Offering, net of unamortized discount and issuance costs.



 

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Summary Historical Consolidated Financial Data of DuPont

The following summary historical consolidated financial data of DuPont for the years ended December 31, 2019, 2018 and 2017 and as of such dates, have been derived from DuPont’s historical audited consolidated financial statements as of and for the years ended December 31, 2019, 2018 and 2017. The selected historical consolidated condensed financial data for the nine months ended September 30, 2020 and 2019 and as of September 30, 2020, as set forth below, have been derived from the interim unaudited consolidated condensed financial statements of DuPont incorporated by reference into this prospectus. This information is only a summary and should be read in conjunction with the financial statements of DuPont and the notes thereto and the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section contained in DuPont’s Annual Report on Form 10-K for the year ended December 31, 2019 and Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2020, which are incorporated by reference into this prospectus. See “Where You Can Find More Information; Incorporation by Reference.”

 

Selected Financial Data   As of and for the
Nine Months Ended
    As of and for the Year Ended  
    (Unaudited)        
In millions except as noted   September 30,
2020
    September 30,
2019
    2019     2018     2017  

Summary of Operations1

         

Net sales

  $ 15,145     $ 16,308     $ 21,512     $ 22,594     $ 11,672  

(Loss) income from continuing operations, net of tax2

  $ (3,153   $ (805   $ (614   $ 405     $ 233  

Income from discontinued operations, net of tax

  $ —     $ 1,217     $ 1,214     $ 3,595     $ 1,058  

Net (loss) income available for DuPont common stockholders

  $ (3,173   $ 322     $ 498     $ 3,845     $ 1,159  

(Loss) earnings per common share – basic:

         

Continuing operations2

  $ (4.31   $ (1.10   $ (0.86   $ 0.46     $ 0.39  

Discontinued operations

  $ —     $ 1.53     $ 1.53     $ 4.54     $ 1.79  

Net (loss) income3

  $ (4.31   $ 0.43     $ 0.67     $ 4.99     $ 2.18  

(Loss) earnings per common share – assuming dilution:

         

Continuing operations2

  $ (4.31   $ (1.10   $ (0.86   $ 0.45     $ 0.38  

Discontinued operations

  $ —     $ 1.53     $ 1.53     $ 4.51     $ 1.77  

Net (loss) income3

  $ (4.31   $ 0.43     $ 0.67     $ 4.96     $ 2.15  

Cash dividends declared per share of common stock

  $ 0.90     $ 1.86     $ 2.16     $ 4.56     $ 5.28  

Period-end Financial Position

         

Total assets4

  $ 72,141       $ 69,349     $ 187,855     $ 191,907  

Long-term debt5

  $ 21,802       $ 13,617     $ 12,624     $ 18  

 

1.

The year ended December 31, 2017 reflects results related to Historical Dow businesses for the entire year and includes the results of the Historical EID businesses for the period beginning on and after September 1, 2017, segregated accordingly between continuing and discontinued operations.

2.

See Notes 4, 6, 8 and 14 to the Consolidated Financial Statements within the DuPont Annual Report on Form 10-K for information on items materially impacting the results for the years ended December 31, 2019, 2018 and 2017, including the effects of the goodwill impairments; gains on divestitures; integration and separation costs; charges related to restructuring programs; and the effects of the U.S. Tax Cuts and Jobs Act, enacted on December 22, 2017 (the “TCJA”).

3.

Earnings per share amounts are computed independently for income from continuing operations, income from discontinued operations and net income attributable to common stockholders. As a result, the per share amounts from continuing operations and discontinued operations may not equal the total per share amounts for net income attributable to common shareholders.



 

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4.

Total assets as of December 31, 2018 and 2017 reflect the combination of Historical Dow and Historical EID. Total assets as of September 30, 2020 and December 31, 2019 reflect assets of DuPont subsequent to the Dow Distribution (as defined below under “Information on DuPont”) and Corteva Distribution.

5.

Long-term debt is revised on a continuing operations basis.

Summary Historical Consolidated Financial Data of IFF

The following summary historical consolidated financial data of IFF for the years ended December 31, 2019, 2018 and 2017 and as of such dates, have been derived from IFF’s historical audited consolidated financial statements as of and for the years ended December 31, 2019, 2018 and 2017. The following summary historical consolidated financial data of IFF for the nine months ended September 30, 2020 and 2019 and as of September 30, 2020 have been derived from the unaudited interim consolidated financial statements of IFF incorporated by reference into this prospectus. This information is only a summary and should be read in conjunction with the financial statements of IFF and the notes thereto and the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section contained in IFF’s Annual Report on Form 10-K for the year ended December 31, 2019 and Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2020, which are incorporated by reference into this document. See “Where You Can Find More Information; Incorporation by Reference.”

 

     As of and for Nine Months Ended
September 30,
     Year Ended December 31,  
(DOLLARS IN THOUSANDS EXCEPT PER SHARE
AND PERCENTAGE AMOUNTS)
   2020      2019      2019(a)      2018(b)      2017(d)  

Consolidated Statement of Income Data

              

Net sales

   $ 3,814,166      $ 3,856,315      $ 5,140,084      $ 3,977,539      $ 3,398,719  

Cost of goods sold(c)

     2,242,030        2,245,729        3,027,336        2,294,832        1,926,256  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Gross profit

     1,572,136        1,610,586        2,112,748        1,682,707        1,472,463  

Operating profit

     465,881        548,471        665,270        583,882        552,630  

Net income

     300,808        379,890        460,268        339,781        295,665  

Net income attributable to noncontrolling interests

     5,169        7,560        4,395        2,479        —    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Net income attributable to IFF stockholders

   $ 295,639      $ 372,330      $ 455,873      $ 337,302      $ 295,665  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Net income per share — basic

   $ 2.68      $ 3.34      $ 4.05      $ 3.81      $ 3.73  

Net income per share — diluted

   $ 2.64      $ 3.30      $ 4.00      $ 3.79      $ 3.72  

Average number of diluted shares (thousands)

     113,631        113,133        113,307        88,121        79,370  

Consolidated Balance Sheet Data

              

Total assets

   $ 13,085,374         $ 13,287,411      $ 12,889,395      $ 4,598,926  

Bank borrowings, overdrafts and current portion of long-term debt

     440,962           384,958        48,642        6,966  

Long-term debt

     3,890,762           3,997,438        4,504,417        1,632,186  

Redeemable noncontrolling interests

     100,005           99,043        81,806        —    

Total Shareholders’ equity

     6,090,315           6,229,548        6,043,374        1,689,294  

Other Data

              

Cash dividends declared per share

   $ 2.27      $ 2.21      $ 2.96      $ 2.84      $ 2.66  

 

(a)

Results for the year ended 2019 include a full year of Frutarom Industries Ltd.’s (“Frutarom”) business operations.

(b)

Results for the year ended 2018 include Frutarom’s business operations since the acquisition date of October 4, 2018.



 

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(c)

The 2018 amount includes $23.6 million related to amortization for inventory “step-up” costs for the Frutarom acquisition and $7.1 million of net reimbursements from suppliers related to the previously disclosed FDA mandated recall. The 2017 amount includes $15.9 million of costs related to the amortization for inventory “step-up” for the Fragrance Resources and PowderPure acquisitions and FDA mandated product recall costs of $11.0 million.

(d)

The amounts have been adjusted to reflect the adoption of ASU 2017-07, which required that employers who present a measure of operating income in their statement of income include only the service cost component of net periodic pension cost and postretirement costs in operating expenses. The impact of the adoption of this standard was a decrease in operating profit by approximately $28.8 million for the fiscal year 2017 and corresponding increases in Other (income) expense, net.

Summary Unaudited Pro Forma Consolidated Financial Data of DuPont

The following summary unaudited pro forma consolidated financial data of DuPont was derived from its historical consolidated financial statements and is being presented to give effect to the proposed separation and distribution of the N&B Business to be effectuated through the following transactions: (i) the transfer of the N&B Business to N&B (generally referred to herein as the “Separation”), (ii) the cash distribution to DuPont of $7,306 million, subject to certain adjustments, including an upward adjustment in amount equal to certain financing costs incurred or paid by DuPont prior to the Distribution and certain other adjustments, which could be downward, as described in the Separation Agreement (generally referred to herein as the “Special Cash Payment”), (iii) the distribution to its stockholders of all of the issued and outstanding shares of N&B common stock through an exchange offer with any remaining shares distributed on a pro rata basis as a clean-up spin-off (generally referred to herein as the “Distribution”) and (iv) following the Distribution, a merger of N&B with Neptune Merger Sub I Inc. (a wholly owned subsidiary of IFF), with N&B as the surviving corporation (generally referred to herein as the “Merger”).

The Distribution will be conducted by way of (i) an exchange offer in which DuPont is offering its stockholders the option to exchange all or a portion of their shares of DuPont common stock for shares of N&B common stock (generally referred to herein as the “Exchange Offer”); and (ii) following the consummation of the Exchange Offer, that the remaining shares, if any, of N&B common stock will be distributed in a clean-up spin-off on a pro rata basis to DuPont stockholders as of the applicable record date (generally referred to herein as the “Clean-Up Spin-Off”). The Separation, the Special Cash Payment, the Exchange Offer, the Clean-Up Spin-Off, and the Merger are collectively referred to as the “Transactions.”

The unaudited pro forma summary financial data for the nine months ended September 30, 2020 and for the year ended December 31, 2019 reflect DuPont’s results as if the Transactions had occurred on January 1, 2019. The unaudited pro forma summary financial data as of September 30, 2020 gives effect to the Transactions as if they had occurred on that date. The summary unaudited pro forma consolidated financial data is derived from, and should be read in conjunction with, the information provided in “DuPont’s Unaudited Pro Forma Consolidated Financial Statements” and the notes thereto. The results of DuPont’s operations may have varied from that presented herein had the Transactions occurred prior to the period or at the date presented.



 

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The summary unaudited pro forma consolidated financial data is presented for illustrative purposes only and does not necessarily reflect the operating results or financial position that would have occurred if the Transactions had been consummated on the dates indicated, nor is it necessarily indicative of the results of operations or financial condition that may be expected for any future period or date. Accordingly, such information should not be relied upon as an indicator of future performance, financial condition or liquidity.

 

Selected Historical Consolidated Financial Data

(in millions, except per share amounts)

   As of and for the
Nine Months Ended
September 30, 2020
    For the Year Ended
December 31, 2019
 

Net sales

   $ 15,145   $ 21,512

Loss from continuing operations, net of tax

     (3,153     (614

Net loss from continuing operations attributable to DuPont common stockholders

     (3,173     (644

Earnings (loss) per common share from continuing operations:

  

 

 

 

 

 

 

 

Basic

     (4.31     (0.86

Diluted

     (4.31     (0.86

Cash dividends declared per share of common stock

     0.90     2.16

Period-end Financial Position

  

 

 

 

 

 

 

 

Total assets

     72,141  

Long-term debt

     21,802  

 

Other Historical Financial Data:

     As of September 30, 2020    

Book value per common share

   $ 51.80

 

Selected Unaudited Pro Forma Financial Data

(in millions, except per share amounts)

   As of and for the
Nine Months Ended
September 30, 2020
    For the Year Ended
December 31, 2019
 

Net sales

   $ 10,588   $ 15,436

Loss from continuing operations, net of tax

     (2,838     (124

Net loss from continuing operations attributable to DuPont common stockholders

     (2,858     (153

Earnings (loss) per common share from continuing operations:

  

 

 

 

 

 

 

 

Basic1

     (3.88     (0.21

Diluted1

     (3.88     (0.21

Cash dividends declared per share of common stock1

     0.90     2.16

Period-end Financial Position

  

 

 

 

 

 

 

 

Total assets

     50,783  

Long-term debt

     13,607  

 

Other Unaudited Pro Forma Financial Data:

     As of September 30, 2020    

Book value per common share1

   $ 37.00

 

1.

The pro forma per share information provided above has been calculated using the historical shares outstanding.



 

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Summary Unaudited Combined Pro Forma Financial Data of IFF and the N&B Business

The following summary unaudited condensed combined pro forma financial information of IFF and the N&B Business is being presented for illustrative purposes only, and this information should not be relied upon for purposes of making any investment or other decisions. The following summary unaudited condensed combined pro forma financial data assume that the N&B Business had been owned by IFF for the period, and at the date presented. IFF and the N&B Business may have performed differently had they actually been combined for all periods or on the date presented. You should also not rely on the following summary unaudited condensed combined pro forma financial data as being indicative of the results or financial condition that would have been achieved had IFF and the N&B Business been combined during the periods or on the date presented or of the actual future results or financial condition of IFF to be achieved following the Transactions. See “Risk Factors—Risks Related to the Combined Company’s Business—The unaudited condensed combined pro forma financial information of IFF and the N&B Business is not intended to reflect what actual results of operations and financial condition would have been had IFF and the N&B Business been a combined company for the periods presented, and therefore these results may not be indicative of the combined company’s future operating performance.”

This information is only a summary and has been derived from and should be read in conjunction with the financial statements of IFF and the notes thereto contained in IFF’s Annual Report on Form 10-K for the year ended December 31, 2019 and IFF’s unaudited interim consolidated financial statements and related notes thereto contained in IFF’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2020, which are incorporated by reference in this document, the financial statements of the N&B Business and the notes thereto included elsewhere in this document and the more detailed unaudited condensed combined pro forma financial statements of IFF and the N&B Business and the notes thereto included elsewhere in this document.



 

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See “Where You Can Find More Information; Incorporation by Reference,” “Unaudited Condensed Combined Pro Forma Information of IFF and the N&B Business” and the audited financial statements of the N&B Business included elsewhere in this document.

 

(In thousands, except per-share data)    As at and for the
nine months ended
September 30, 2020
     For the year ended
December 31, 2019
 

Statement of Income Data:

     

Net sales

   $ 8,370,876      $ 11,216,240  
  

 

 

    

 

 

 

Net income (loss)

     537,683        (239,903

Net income attributable to noncontrolling interests

     5,043        4,947  
  

 

 

    

 

 

 

Net income (loss) attributable to common stockholders

   $
532,640
 
   $ (244,850)  
  

 

 

    

 

 

 

Net income (loss) per share — basic

   $ 2.09      $ (0.96)  

Net income (loss) per share — diluted

   $
2.08
 
   $ (0.96)  

Average number of shares outstanding—basic

     254,270        254,088  

Average number of shares outstanding—diluted

     255,753        254,088  

Balance Sheet Data:

     

Total assets

   $
41,231,081
 
  

Long-term debt

   $
11,599,145
 
  

Total stockholders’ equity

   $ 22,374,444     

Summary Comparative Historical and Pro Forma Per Share Data

The following table sets forth certain historical and pro forma per share data for IFF. The IFF historical data have been derived from and should be read together with IFF’s audited consolidated financial statements and related notes thereto contained in IFF’s Annual Report on Form 10-K for the fiscal year ended December 31, 2019 and IFF’s unaudited interim consolidated financial statements and related notes thereto contained in IFF’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2020, which are incorporated by reference into this prospectus. IFF’s pro forma data have been derived from the unaudited condensed combined pro forma financial statements of IFF and the N&B Business included elsewhere in this prospectus. See “Where You Can Find More Information; Incorporation by Reference.”



 

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This summary comparative historical and pro forma per share data are being presented for illustrative purposes only. IFF and the N&B Business may have performed differently had the Transactions occurred prior to the period or at the date presented. You should not rely on the pro forma per share data presented as being indicative of the results that would have been achieved had the N&B Business been separated from DuPont and combined with IFF during the period or at the date presented or of the actual future results or financial condition of IFF or the N&B Business to be achieved following the Transactions.

 

     As of and for the
Nine Months Ended September 30, 2020
     As of and for the Year Ended
December 31, 2019
 

IFF

     Historical          Pro Forma          Historical          Pro Forma    

(in thousands, except per share data)

           

Basic earnings (loss) per share

   $ 2.68      $ 2.09      $ 4.05      $ (0.96

Diluted earnings (loss) per share

   $ 2.64      $ 2.08      $ 4.00      $ (0.96

Weighted average common shares outstanding—Basic

     112,148        254,270        111,966        254,088  

Weighted average common shares outstanding—Diluted

     113,631        255,753        113,307        254,088  

Book value per share of common stock

   $ 54.31      $ 87.99      $ 55.64      $ 97.22  

Dividends declared per share of common stock

   $ 2.27      $ 2.27      $ 2.96      $ 2.96  


 

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The following table sets forth certain historical and pro forma per share data for DuPont. The DuPont historical data has been derived from and should be read together with DuPont’s unaudited consolidated financial statements and related notes thereto contained in DuPont’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2020 and Annual Report on Form 10-K for the fiscal year ended December 31, 2019, which are incorporated by reference into this prospectus. DuPont’s pro forma data has been derived from the unaudited pro forma combined financial statements of DuPont included elsewhere in this prospectus. See “Where You Can Find More Information; Incorporation by Reference.”

This summary comparative historical and pro forma per share data is being presented for illustrative purposes only. DuPont may have performed differently had the Transactions occurred prior to the period or as of the date presented. The pro forma per share information does not purport to represent what the actual results of operations or the financial position that would have been achieved had the N&B Business been separated from DuPont and combined with IFF during the period or at the date presented, nor is it indicative of the future results of operations or financial position of DuPont to be achieved following the Transactions.

 

DuPont

   As of and for the
Nine Months Ended
September 30, 2020
     As of and for the
Year Ended
December 31, 2019
 
   Historical      Pro Forma1      Historical      Pro Forma1  
(in millions, except per share amounts)                            

Basic earnings (loss) per share from continuing operations

   $ (4.31    $ (3.88    $ (0.86    $ (0.21

Diluted earnings (loss) per share from continuing operations

     (4.31      (3.88      (0.86      (0.21

Weighted average common shares outstanding—basic

     735.8      735.8      746.3      746.3

Weighted average common shares outstanding—diluted

     735.8      735.8      746.3      746.3

Book value per share of common stock

     51.80      37.00      

Cash dividends declared per share of common stock

     0.90      0.90      2.16      2.16

 

1.

The pro forma per share information provided above has been calculated using the historical shares outstanding.

Comparison of Market Prices

The following table sets forth the closing sale price per share of IFF common stock and DuPont common stock as reported on the NYSE as of December 13, 2019, the last trading day prior to the public announcement of the Transactions.

 

     Closing Sale Price
Per Share of

IFF
Common Stock
     Closing Sale Price
Per Share of
DuPont
Common Stock
 

December 13, 2019

   $ 133.98      $ 64.80  


 

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RISK FACTORS

You should carefully consider the following risks, together with the other information contained or incorporated by reference in this prospectus and the exhibits hereto. Some of the risks described below relate principally to the business and the industry in which IFF, including the N&B Business, will operate after the Transactions, while others relate principally to the Transactions and participation in the Exchange Offer. The remaining risks relate principally to the securities markets generally and ownership of shares of IFF common stock. For a discussion of additional uncertainties associated with forward-looking statements in this prospectus, please see the section entitled “Cautionary Statement Concerning Forward-Looking Statements.” In addition, you should consider the risks associated with IFF’s business that appear in IFF’s Annual Report on Form 10-K for the year ended December 31, 2019, which is incorporated by reference into this prospectus. For a description of the material risks relating to DuPont, please read “Risk Factors” in DuPont’s Annual Report on Form 10-K for the year ended December 31, 2019, and which are incorporated by reference in this prospectus.

Any of the following risks could materially and adversely affect the business, financial condition and results of operations of IFF, the N&B Business or the combined company and the actual outcome of matters as to which forward-looking statements are made in this prospectus. In such case, the trading price for IFF common stock could decline, and you could lose all or part of your investment. The risks described below are not the only risks that IFF and the N&B Business currently face or that the combined company will face after the consummation of the Transactions. Additional risks and uncertainties not currently known or that are currently expected to be immaterial may also materially and adversely affect the combined company’s business, financial condition and results of operations or the price of combined company’s common stock in the future. Past financial performance may not be a reliable indicator of future performance, and historical trends should not be used to anticipate results or trends in future periods.

Risks Related to the Transactions

The calculation of merger consideration will not be adjusted if there is a change in the value of the N&B Business or its assets or the value of IFF before the Transactions are completed.

The calculation of the number of shares of IFF common stock to be issued to DuPont stockholders in the Merger is based on fixed percentages and will not be adjusted (i) if the value of the business or assets of the N&B Business increases prior to the consummation of the Merger or the value of IFF decreases prior to the Merger, or (ii) if the value of the business or assets of the N&B Business declines prior to the consummation of the Merger or the value of IFF increases prior to the Merger. IFF may not be permitted to terminate the Merger Agreement because of changes in the value of the N&B Business or its assets. IFF will not be permitted to terminate the Merger Agreement solely because of changes in the market price of IFF common stock.

The Transactions may not be completed on the terms or timeline currently contemplated, or at all, as IFF and DuPont may be unable to satisfy the conditions or obtain the approvals required to complete the Transactions or such approvals may contain material restrictions or conditions.

The consummation of the Transactions is subject to numerous conditions, as described in this prospectus, including the occurrence of certain events contemplated by the Merger Agreement and the Separation Agreement (such as the Separation, approvals from governmental agencies and the receipt of IFF shareholder approval for the Share Issuance). Neither DuPont nor IFF can make any assurances that the Transactions will be consummated on the terms or timeline currently contemplated, or at all. Recent events involving the novel coronavirus (COVID-19) could also impact the satisfaction of the conditions described in the Merger Agreement and the Separation Agreement. Each of DuPont and IFF has and will continue to expend time and resources and incur expenses related to the proposed Transactions. These expenses must be paid regardless of whether the Transactions are consummated.

Governmental agencies may not approve the Transactions, may impose conditions to the approval of the Transactions or require changes to the terms of the Transactions. Any such conditions or changes could have the

 

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effect of delaying completion of the Transactions, imposing costs on or limiting the revenues of the combined company following the Transactions or otherwise reducing the anticipated benefits of the Transactions.

N&B will need to obtain the proceeds of the Term Loan Facility and the Notes in order to fund the Special Cash Payment. The funding of the loans under the Term Loan Facility will be available upon the satisfaction of several limited conditions precedent, including (i) the accuracy of certain representations and warranties, (ii) the absence of a material adverse effect on N&B and (iii) the consummation of the Separation and the Merger in accordance with the Merger Agreement and the Separation Agreement substantially concurrently with the funding of the loans under the Term Loan Facility. The proceeds of the Notes are presently being held in a segregated escrow account and the escrow agent will only release the funds to N&B upon presentation by N&B of an officer’s certificate of a responsible officer addressed to the escrow agent with a copy to the trustee of the Notes on or prior to September 15, 2021, certifying that substantially contemporaneously with, or promptly following, the release of funds, the Merger will be consummated in accordance with the Merger Agreement and no event of default related to certain events of bankruptcy, insolvency or reorganization has occurred and is continuing or will result therefrom.

If completed, the Transactions may not be successful or achieve their anticipated benefits.

If the Transactions are completed, IFF may not be able to successfully realize anticipated growth opportunities and synergies, or integrate IFF’s business and operations with the N&B Business’s business and operations. See “—Risks Related to the Combined Company’s Business—The integration of the N&B Business with IFF may present significant challenges, and the combined company may not realize anticipated synergies and other benefits of the Transaction.”

After the Transactions, IFF will have significantly more revenue, expenses, assets and employees than IFF did prior to the Transactions. In the Transactions, IFF will also be assuming certain liabilities of the N&B Business and taking on other obligations (including collective bargaining agreements and certain pension obligations with respect to transferred employees). IFF may not successfully or cost-effectively integrate the N&B Business’s business and operations into IFF’s existing business and operations. Even if the combined company is able to integrate the combined businesses and operations successfully, this integration may not result in the realization of the full benefits of the growth and other opportunities that IFF currently expects from the Transactions within the anticipated time frame, or at all.

Failure to complete the Transactions could adversely affect the market price of IFF common stock as well as its business, financial condition and results of operations.

If the Transactions are not completed for any reason, the price of IFF common stock may decline, or IFF’s business, financial condition and results of operations may be impacted to the extent that the market price of IFF common stock reflects positive market assumptions that the Transactions will be completed and the related benefits will be realized; based on significant expenses, such as legal, advisory and financial services which generally must be paid regardless of whether the Transactions are completed; based on potential disruption of the business of IFF and distraction of its workforce and management team; and the requirement in the Merger Agreement that, under certain limited circumstances, IFF must pay DuPont the Termination Fee or reimburse DuPont for expenses relating to the Transactions.

Investors holding shares of IFF common stock immediately prior to the completion of the Transactions will, in the aggregate, have a significantly reduced ownership and voting interest in IFF after the Transactions and will exercise less influence over management.

Investors holding shares of IFF common stock immediately prior to the completion of the Transactions will, in the aggregate, own a significantly smaller percentage of the combined company immediately after the completion of the Transactions. Immediately following the completion of the Transactions, it is expected that

 

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DuPont stockholders will hold approximately 55.4 percent of the outstanding shares of IFF common stock, on a fully diluted basis. IFF’s existing shareholders will continue to hold the remaining approximately 44.6 percent of the outstanding shares of IFF common stock, on a fully diluted basis. Consequently, IFF shareholders, collectively, will be able to exercise less influence over the management and policies of the combined company than they will be able to exercise over IFF’s management and policies immediately prior to the completion of the Transactions.

The Merger Agreement contains provisions that may discourage other companies from trying to acquire IFF.

The Merger Agreement contains provisions that may discourage a third party from submitting a business combination proposal to IFF prior to the closing of the Transactions that might result in greater value to IFF shareholders than the Transactions. The Merger Agreement generally prohibits IFF from soliciting any alternative transaction proposal and IFF may not terminate the Merger Agreement in order to accept, and must hold a meeting of its shareholders to approve the Share Issuance, even if an unsolicited alternative transaction proposal that the IFF board of directors determines is superior to the Transactions is received. In addition, before the IFF board of directors may withdraw or modify its recommendation, DuPont has the opportunity to negotiate with IFF to modify the terms of the Transactions in response to any competing acquisition proposals. If the Merger Agreement is terminated by IFF or DuPont in certain limited circumstances, IFF may be obligated to pay the Termination Fee to DuPont, which would represent an additional cost for a potential third party seeking a business combination with IFF.

The announcement and pendency of the Transactions could have an adverse effect on IFF’s stock price as well as the business, financial condition, results of operations or business prospects of IFF and the N&B Business.

The announcement and pendency of the Merger could disrupt IFF’s and N&B’s business in negative ways. For example, customers and other third-party business partners of IFF or the N&B Business may seek to terminate and/or renegotiate their relationships with IFF or the N&B Business as a result of the Merger, whether pursuant to the terms of their existing agreements with IFF and/or the N&B Business or otherwise. In addition, current and prospective employees of IFF and the N&B Business may experience uncertainty regarding their future roles with the combined company, which might adversely affect IFF’s and N&B’s ability to retain, recruit and motivate key personnel. Should they occur, any of these events could adversely affect the stock price of IFF, or harm the financial condition, results of operations or business prospects of, IFF or N&B.

The fairness opinions obtained by the IFF board of directors from Greenhill and Morgan Stanley, respectively, will not reflect changes, circumstances, developments or events that may have occurred or may occur after the date of such opinions.

On December 15, 2019, each of Greenhill and Morgan Stanley separately rendered to the IFF board of directors an oral opinion, each of which was subsequently confirmed in writing by delivery of separate written opinions dated December 15, 2019, that, as of such date of their respective written fairness opinions, and based upon and subject to the assumptions made, procedures followed, matters considered, and qualifications and limitations on the scope of review undertaken by each of Greenhill and Morgan Stanley as set forth in such written fairness opinions, the exchange ratio pursuant to the proposed Merger Agreement was fair, from a financial point of view, to IFF.

The IFF board of directors has not obtained an updated fairness opinion as of the date of this document from Greenhill or Morgan Stanley, and the IFF board of directors does not expect to receive an updated fairness opinion prior to the completion of the Merger.

The opinions delivered by Greenhill and Morgan Stanley were necessarily based on financial, economic, market and other conditions as they existed on, and on the information made available to Greenhill and Morgan Stanley,

 

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respectively, as of, December 15, 2019. The opinions do not speak as of the time the Merger will be completed or as of any date other than the date of such opinions. Although subsequent developments may affect their respective opinions, neither Greenhill nor Morgan Stanley has any obligation to update, revise or reaffirm its opinion. These developments may include, among other things, changes to the operations and prospects of the N&B Business or IFF, regulatory or legal changes, general industry, market and economic conditions and other factors that may be beyond the control of DuPont, the N&B Business or IFF, and on which such opinions were based, and that may alter the value of the N&B Business and IFF or the prices of securities of DuPont and IFF at the effective time of the Merger. The value of the merger consideration has fluctuated since, and could be materially different from its value as of, the date of the opinions delivered by Greenhill and Morgan Stanley, and neither Greenhill nor Morgan Stanley has expressed any opinion as to the price or range of prices at which any securities of DuPont or IFF may trade at any time.

For a more complete description of the opinion that Greenhill delivered to the IFF board of directors and a summary of the material financial analyses performed by Greenhill and reviewed by the IFF board of directors in connection with its opinion, please refer to the section entitled “The Transactions—Opinion of Greenhill & Co., LLC” and to the full text of the written opinion included as Annex A to this document. For a more complete description of the opinion that Morgan Stanley delivered to the IFF board of directors and a summary of the material financial analyses performed by Morgan Stanley and reviewed by the IFF board of directors in connection with its opinion, please refer to the section “The Transactions—Opinion of Morgan Stanley & Co. LLC” and to the full text of the written opinion included as Annex B to this document.

IFF’s estimates and judgments related to the acquisition accounting models used to record the purchase price allocation may be inaccurate.

Management will make significant accounting judgments and estimates for the application of acquisition accounting under GAAP, and the underlying valuation models. IFF’s business, operating results and financial condition could be materially and adversely impacted in future periods if IFF’s accounting judgments and estimates related to these models prove to be inaccurate.

IFF may be required to recognize impairment charges for goodwill and other intangible assets.

The proposed Transactions will add approximately $21.0 billion of goodwill and other intangible assets to IFF’s consolidated balance sheet. In accordance with GAAP, management periodically assesses these assets to determine if they are impaired. Significant negative industry or economic trends, disruptions to IFF’s business, inability to effectively integrate acquired businesses, unexpected significant changes or planned changes in use of the assets, divestitures and market capitalization declines may impair goodwill and other intangible assets. Any charges relating to such impairments would adversely affect results of operations in the periods recognized.

IFF is required to abide by potentially significant restrictions which could limit IFF’s ability to undertake certain corporate actions (such as the issuance of IFF common stock or the undertaking of a merger or consolidation) that otherwise could be advantageous.

During the two year period following the Distribution or, in the case of certain historic transactions undertaken by DuPont, during the two year period following each such historic transaction, Section 7.01 of the Tax Matters Agreement generally will prohibit N&B, IFF and their respective subsidiaries from taking certain actions that could cause the Distribution, the Merger, certain related transactions and certain historic transactions undertaken by DuPont to fail to qualify as tax-free transactions unless IFF and N&B receive either (i) an opinion of counsel or (ii) a ruling from the IRS or other applicable tax authority, in either case acceptable to DuPont (in DuPont’s discretion), to the effect that such action or actions will not cause a relevant transaction to fail to qualify as a tax-free transaction. These restrictions may limit IFF’s ability to pursue certain strategic transactions or engage in other transactions, including using IFF common stock to make acquisitions and in connection with equity capital market transactions or disposing of certain businesses that might increase the value of IFF’s business.

 

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The Distribution could result in significant tax liability, and IFF may be obligated to indemnify DuPont for any such tax liability imposed on DuPont.

The completion of the Transactions is conditioned upon the receipt by DuPont of the Tax Opinion to the effect that, among other things, (a) the Parent Contribution, Special Cash Payment and Distribution, taken together, will qualify as a reorganization under Sections 355(a), 361 and 368(a)(1)(D) of the Code and (b) the Merger and the Second Merger will be treated as an integrated plan described in Rev. Rul. 2001-46, 2001-2 C.B. 321 and qualify as a tax-free reorganization within the meaning of Section 368(a) of the Code. Accordingly, DuPont’s stockholders will not recognize any taxable income, gain or loss as a result of the Distribution or the Mergers for U.S. federal income tax purposes (except for any gain or loss attributable to the receipt of cash in lieu of fractional shares) and DuPont will not recognize income, gain or loss except for gain to the extent the Special Cash Payment exceeds DuPont’s adjusted tax basis in the N&B common stock or the proceeds of the Special Cash Payment are not used for certain permitted purposes.

The Tax Opinion will be based upon various factual representations and assumptions, as well as certain undertakings made by DuPont, IFF and N&B. If any of those factual representations or assumptions are untrue or incomplete in any material respect, any undertaking is not complied with, or the facts upon which the opinion will be based are materially different from the facts at the time of the Distribution, the Distribution may not qualify (in whole or part) for tax-free treatment. Opinions of counsel are not binding on the IRS. As a result, the conclusions expressed in the opinions of counsel could be challenged by the IRS, and if the IRS prevails in such challenge, the tax consequences to DuPont and its stockholders could be materially less favorable. DuPont may also incur tax and other obligations as a result of internal restructuring transactions undertaken in order to effectuate the Distribution, which are not covered by the Tax Opinion.

If the Exchange Offer were determined not to qualify for non-recognition of gain and loss under Sections 355 and 368(a)(1)(D) of the Code, each DuPont stockholder who receives N&B common stock in the Exchange Offer would generally be treated as recognizing taxable gain or loss equal to the difference between the fair market value of the N&B common stock received by the stockholder in the Exchange Offer and its tax basis in the shares of DuPont common stock exchanged therefor, or, in certain circumstances, as receiving a taxable distribution equal to the fair market value of the N&B common stock received by the stockholder in the Exchange Offer. If the Clean-Up Spin-Off or the Spin-Off were determined not to qualify for non-recognition of gain and loss under Sections 355 and 368(a)(1)(D) of the Code, each DuPont stockholder who receives N&B common stock in the Clean-Up Spin-Off or the Spin-Off would generally be treated as receiving a taxable distribution equal to the fair market value of the N&B common stock received by the stockholder in the Clean-Up Spin-Off or the Spin-Off.

In addition, if the Distribution were determined not to qualify for non-recognition of gain and loss under Sections 355 and 368(a)(1)(D) of the Code, DuPont would generally recognize gain (but not loss) with respect to the transfer of N&B common stock in the Distribution.

Even if the Distribution otherwise qualifies under Section 355 and 368(a)(1)(D) of the Code, the Distribution would be taxable to DuPont (but not to DuPont stockholders) pursuant to Section 355(e) of the Code if one or more persons acquire a 50% or greater interest (measured by vote or value) in the stock of DuPont or N&B, directly or indirectly (including through acquisitions of IFF stock after the completion of the Merger), as part of a plan or series of related transactions that includes the Distribution. For this purpose, any direct or indirect acquisitions of DuPont or N&B stock (including through acquisitions of IFF stock after the completion of the Merger) within the period beginning two years before the Distribution and ending two years after the Distribution are presumed to be part of a plan that includes the Distribution, although DuPont, N&B or IFF may be able to rebut that presumption in certain circumstances. The process for determining whether an acquisition is part of a plan under these rules is complex, inherently factual in nature, and subject to a comprehensive analysis of the facts and circumstances of the particular case. Although it is expected that the Mergers will be treated as part of such a plan, the Mergers standing alone will not cause Section 355(e) of the Code to apply to the Distribution because holders of N&B common stock immediately before the Mergers will hold more than 50% of the stock of

 

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the combined company (by vote and value) immediately after the Mergers. However, if the IRS were to determine that other direct or indirect acquisitions of stock of DuPont or N&B, either before or after the Distribution, were part of a plan or series of related transactions that includes the Distribution, such determination could cause Section 355(e) of the Code to apply to the Distribution, which could result in significant tax liability.

The Distribution and certain aspects of the Separation could be taxable to DuPont if N&B or IFF were to engage in a Spinco Tainting Act (as defined in the Tax Matters Agreement). A Spinco Tainting Act is generally any action (or inaction) within the control of IFF, N&B or their affiliates, any event involving the common stock of N&B or IFF or any assets of any N&B Companies, or any breach by any of the N&B Companies of any factual representations, assumptions, or undertakings made by it, in each case, that would affect the nonrecognition treatment of the Distribution or certain aspects of the Separation for U.S. federal income tax purposes, as described above. Under the Tax Matters Agreement, N&B and IFF will be required to indemnify DuPont against any taxes resulting from the Distribution or certain aspects of the Separation that arise as a result of a Spinco Tainting Act. If DuPont were to recognize gain on the Distribution or certain aspects of the Separation for reasons not related to a Spinco Tainting Act by N&B or IFF, DuPont would not be entitled to be indemnified under the Tax Matters Agreement and the resulting tax to DuPont could be substantial and could have a material adverse effect on DuPont. If N&B or IFF were required to indemnify DuPont as a result of the Distribution or certain aspects of the Separation being taxable, this indemnification obligation would likely be substantial and could have a material adverse effect on IFF, including with respect to its financial condition and results of operations.

If the Mergers do not qualify as a tax-free reorganization under Section 368 of the Code, the stockholders of DuPont may have significant tax liability.

The obligations of DuPont and IFF to consummate the Transactions are conditioned on, among other things, the receipt by DuPont of the Tax Opinion to the effect that the Mergers will be treated as a tax-free reorganization in which no gain will be recognized for U.S. federal income tax purposes. The opinion will be based upon various factual representations and assumptions, as well as certain undertakings made by DuPont, IFF and N&B. If any of those factual representations or assumptions are untrue or incomplete in any material respect, any undertaking is not complied with, or the facts upon which the opinion will be based are materially different from the facts at the time of the Distribution, the Mergers may not qualify (in whole or part) for tax-free treatment. Opinions of counsel are not binding on the IRS. As a result, the conclusions expressed in the opinions of counsel could be challenged by the IRS, and if the IRS prevails in such challenge, the tax consequences to N&B and holders of shares of N&B common stock could be materially less favorable. If the Mergers were taxable, holders of shares of N&B common stock would be considered to have made a taxable sale of their shares of N&B common stock to IFF, and holders of shares of N&B common stock would generally recognize taxable gain or loss on their receipt of IFF common stock in the Mergers. See “U.S. Federal Income Tax Consequences of the Transactions.”

Some of IFF’s directors and executive officers have interests in seeing the Transactions completed that may be different from, or in addition to, those of other IFF shareholders.

You should be aware that certain of IFF’s directors and executive officers have financial interests in the Transactions that may be different from, or in addition to, the interests of IFF’s shareholders generally. The members of the IFF board of directors were aware of and considered these interests, among other matters, in reaching the determination to approve the terms of the Transactions, including the Merger, and in recommending to IFF’s shareholders that they vote to approve the Share Issuance.

For a description and quantification of the benefits that IFF’s executive officers and directors may receive as a result of these interests, see “The Transactions—Interests of IFF’s Directors and Executive Officers in the Transactions.”

 

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IFF and the N&B Business may have difficulty attracting, motivating and retaining executives and other employees in light of the Transactions.

IFF and the N&B Business may have difficulty attracting, motivating and retaining executives and other employees in light of the Transactions. Uncertainty about the effect of the Transactions on the employees of IFF and the N&B Business may have an adverse effect on IFF and the N&B Business. This uncertainty may impair IFF’s and the N&B Business’ ability to attract, retain and motivate personnel until the Transactions are completed. Employee retention may be particularly challenging during the pendency of the Transactions, as employees may feel uncertain about their future roles with IFF or the N&B Business after their combination. If employees of IFF or the N&B Business depart because of issues relating to the uncertainty or perceived difficulties of integration or a desire not to become employees of IFF after the Transactions, IFF’s ability to realize the anticipated benefits of the Transactions could be reduced.

IFF may waive one or more of the conditions to the consummation of the Transactions without re-soliciting shareholder approval.

IFF may determine to waive, in whole or in part, one or more of the conditions to its obligations to consummate the Transactions, to the extent permitted by applicable law. If IFF waives the satisfaction of a material condition to the consummation of the Transactions, IFF will evaluate the appropriate facts and circumstances at that time and re-solicit shareholder approvals of the Share Issuance if required to do so by applicable law or the rules of the NYSE. In some cases, if the IFF board of directors determines that such waiver or its effect on IFF’s shareholders does not rise to the level of materiality that would require re-solicitation of proxies pursuant to applicable law or the rules of the NYSE, IFF would complete the Transactions without seeking further shareholder approval. Any determination whether to waive any condition to the Transactions or as to re-soliciting IFF shareholder approval or amending the proxy statement as a result of a waiver will be made by the IFF board of directors at the time of such waiver based on the facts and circumstances as they exist at that time.

IFF, by acquiring N&B in the Merger, will, on a consolidated basis, assume and be responsible for all N&B Liabilities following the closing of the Transactions, and is acquiring the N&B Assets on an as is, where is basis and with all faults, in each case, notwithstanding any breach of any representation or warranty of the Merger Agreement.

As described in the description of the Separation Agreement on page 298 of this document, N&B and its subsidiaries, which are being acquired by IFF in the Merger, will accept, assume, agree to pay, discharge, fulfill, and to the extent applicable, comply with on a timely basis, the N&B Liabilities, regardless of (i) when or where such liabilities arose or arise (whether arising prior to, at or after the Distribution), (ii) where or against whom such liabilities are asserted or determined, (iii) whether arising from or alleged to arise from negligence, gross negligence, recklessness, violation of law, fraud or misrepresentation by any member of the DuPont Group or N&B Group, as the case may be, or any of their past or present respective directors, officers, employees, agents, subsidiaries or affiliates and (iv) which entity is named in any Action associated with any liability. The Separation Agreement further provides that generally all assets are being conveyed to IFF on an as-is, where is basis and with all faults, and while DuPont is subject to certain indemnification obligations in favor of N&B and IFF under the Separation Agreement, these are generally limited to indemnification for certain indemnifiable losses to the extent relating to, arising out of or resulting from the liabilities retained by DuPont (or any claim by a third party that would, if resolved in favor of the claimant, constitute such a liability) or any breach by DuPont of any provision of the Separation Agreement.

Furthermore, while the Merger Agreement contains certain representations and warranties about the N&B Business, the Merger Agreement provides that all representations and warranties of the parties contained therein shall not survive the effective time of the Merger. Accordingly, there are no remedies available to the parties with respect to any breach of representations of the parties to the Merger Agreement after the effective time of the Merger, except for any rights IFF may have under applicable law to bring a claim relating to or arising from

 

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fraud with respect to any representation or warranty made in the Merger Agreement, which we note is excepted from the release among the parties to the Separation Agreement described on page 306 of this document. With respect to the other Ancillary Agreements, other than in the case of certain Space Leases, they do not contain any representations or warranties in favor of IFF.

As such, notwithstanding whether any N&B Liability or any issue with an N&B Asset is related to a breach of a representation or warranty in the Merger Agreement, N&B, and by virtue of the Merger, IFF, will bear full responsibility for any and all N&B Liabilities and any issues with an N&B Assets following the closing of the Transactions. To the extent any such N&B Liabilities are larger than anticipated, or an issue with an N&B Asset prohibits the N&B Business from performing as planned, they could have an adverse impact on the business, results of operation and financial condition of the combined company.

Risks Related to the Exchange Offer

Tendering DuPont stockholders may receive a reduced premium or may not receive any premium in the Exchange Offer.

The Exchange Offer is designed to permit you to exchange your shares of DuPont common stock for shares of N&B common stock at a 7% discount to the per-share value of N&B common stock, calculated as set forth in this prospectus. Stated another way, for each $100 of your DuPont common stock accepted in the Exchange Offer, you will receive approximately $107.53 of N&B common stock (subject to the exception described below). The value of the DuPont common stock will be based on the calculated per-share value of DuPont common stock on the NYSE and the value of the shares of N&B common stock will be based on the calculated per-share value of IFF common stock on the NYSE, in each case determined by reference to the simple arithmetic average of the daily VWAP on each of the Valuation Dates.

The number of shares you can receive is, however, subject to an upper limit of 0.7180 shares of N&B common stock for each share of DuPont common stock accepted in the Exchange Offer. As a result, you may receive less than $107.53 of N&B common stock for each $100 of DuPont common stock, depending on the calculated per-share value of DuPont common stock and the calculated per-share value of N&B common stock at the expiration date. Because of the limit on the number of shares of N&B common stock you will receive in the Exchange Offer, if there is a drop of sufficient magnitude in the trading price of IFF common stock relative to the trading price of DuPont common stock, and/or if there is an increase of sufficient magnitude in the trading price of DuPont common stock relative to the trading price of IFF common stock, you may not receive $107.53 of N&B common stock for each $100 of DuPont common stock, and could receive much less.

For example, if the calculated per-share value of DuPont common stock was $71.33 (the highest closing price for DuPont common stock on the NYSE during the three-month period prior to commencement of the Exchange Offer) and the calculated per-share value of N&B common stock was $101.44 (the lowest closing price for IFF common stock on the NYSE during that three-month period), the value of N&B common stock, based on the IFF common stock price, received for shares of DuPont common stock accepted for exchange would be approximately $102.11 for each $100 of DuPont common stock accepted for exchange.

There are also risks associated with calculating the exchange ratio as of the Valuation Dates and not using the closing prices of DuPont common stock and IFF common stock on the expiration date of the Exchange Offer, such that you could receive fewer shares of N&B common stock than you would have received if the exchange ratio were determined using the closing prices of DuPont common stock and IFF common stock on the expiration date of the Exchange Offer. For example, if the trading price of DuPont common stock were to increase during the last two full trading days of the Exchange Offer, the average DuPont stock price used to calculate the exchange ratio would likely be lower than the closing price of shares of DuPont common stock on the expiration date of the Exchange Offer. As a result, you would receive fewer shares of N&B common stock, and therefore effectively fewer shares of IFF common stock, for each $100 of shares of DuPont common stock than you would

 

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have if the DuPont stock price were calculated on the basis of the closing price of shares of DuPont common stock on the expiration date of the Exchange Offer or on the basis of an averaging period that includes the last two full trading days prior to the expiration of the Exchange Offer period. Similarly, if the trading price of IFF common stock were to decrease during the last two full trading days prior to the expiration of the Exchange Offer period, the average IFF stock price used to calculate the exchange ratio would likely be higher than the closing price of IFF common stock on the last full trading day prior to the expiration date. This could also result in your receiving fewer shares of N&B common stock, and therefore effectively fewer shares of IFF common stock, for each $100 of DuPont common stock than you would otherwise receive if the IFF common stock price were calculated on the basis of the closing price of IFF common stock on the last full trading day prior to the expiration date or on the basis of an averaging period that included the last two full trading days prior to the expiration of the Exchange Offer period.

In addition, there is no assurance that holders of shares of DuPont common stock that are exchanged for shares of N&B common stock in the Exchange Offer will be able to sell the shares of IFF common stock after receipt in the Merger at prices comparable to the calculated per-share value of N&B common stock at the expiration date. For example, while DuPont is offering all of the shares of N&B common stock in the Exchange Offer, DuPont does not expect the Exchange Offer to be fully subscribed, such that shares of N&B common stock will also be distributed in the Clean-Up Spin-Off. These shares of N&B common stock will convert into IFF common stock in the Merger. DuPont stockholders who receive IFF common stock as a result of the Clean-Up Spin-Off may not want to be IFF common stock holders and may sell those shares immediately in the public market. Although DuPont has no actual knowledge of any plan or intention of any significant stockholder of DuPont to sell the IFF common stock it receives as a result of the Clean-Up Spin-Off and the Merger, it is possible that some DuPont stockholders will sell the IFF common stock they receive if, for reasons such as IFF’s business profile or market capitalization, IFF does not fit their investment objectives, or in the case of index funds, IFF is not a participant in the index in which they are investing. The sales of significant amounts of IFF common stock relating to the above events or the perception in the market that such sales will occur may decrease the market price of IFF’s common stock.

DuPont stockholders receiving shares of N&B common stock in the Exchange Offer and the expected Clean-Up Spin-Off may experience a delay prior to receiving their shares of IFF common stock or their cash in lieu of fractional shares, if any.

Holders of shares of DuPont common stock participating in the Exchange Offer will receive their shares of IFF common stock or cash in lieu of fractional shares, if any, only upon surrender of all necessary documents, duly executed, to the Exchange Agent. In general, until the distribution of the shares of IFF common stock to the individual stockholder has been completed, the relevant holder of shares of IFF common stock will not be able to sell its shares of IFF common stock. Consequently, in case the market price for IFF common stock should decrease during that period, the relevant stockholder (which are DuPont stockholders receiving shares of N&B common stock in the Exchange Offer and the expected Clean-Up Spin-Off) would not be able to stop any losses by selling the shares of IFF common stock. Similarly, the former holders of shares of N&B common stock who received cash in lieu of fractional shares will not be able to invest the cash until the distribution to the relevant stockholder has been completed, and they will not receive interest payments for this time period.

The trading prices of IFF common stock may not be an appropriate proxy for the prices of N&B common stock.

The calculated per-share value for N&B common stock is based on the trading prices for IFF common stock, which may not be an appropriate proxy for the prices of N&B common stock. There is currently no trading market for N&B common stock and no such market will be established in the future. Immediately following the consummation of the Exchange Offer, Merger Sub I will be merged with and into N&B, and N&B will continue as the surviving company and a wholly owned subsidiary of IFF. In the Merger, each outstanding share of N&B common stock will be converted into the right to receive a number of fully paid and nonassessable shares of IFF

 

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common stock such that immediately after the Merger such DuPont stockholders will collectively own approximately 55.4% of IFF common stock on a fully diluted basis, and IFF shareholders will collectively own approximately 44.6% of IFF common stock on a fully diluted basis, in each case excluding any overlaps in the pre-transaction stockholder bases (calculated as further described in “The Merger Agreement—Merger Consideration”). There can be no assurance, however, that IFF common stock after the Merger will trade on the same basis as IFF common stock traded prior to the consummation of the Merger. In addition, it is possible that the trading prices of IFF common stock prior to the consummation of the Merger will not be indicative of the anticipated value of IFF common stock after the Merger. For example, trading prices of IFF common stock on the Valuation Dates could reflect some uncertainty as to the timing or the consummation of the Merger or could reflect trading activity by investors seeking to profit from market arbitrage.

As a result of the Pricing Mechanism (as defined below) utilized in the Exchange Offer, the exchange ratio for the Exchange Offer will not be fixed prior to the launch of the Exchange Offer, but will be instead determined while the Exchange Offer is open, creating a risk of arbitrage trading during the Exchange Offer that could impact the final exchange ratio.

The Exchange Offer does not set forth a fixed exchange ratio at the outset of the Exchange Offer. Rather, the Exchange Offer price is expressed as a ratio of N&B common stock for each $100 of DuPont common stock validly tendered and not withdrawn pursuant to the Exchange Offer (subject to the limit on the exchange ratio that could result from the upper limit, as described in greater detailed in this document). The Exchange Offer’s pricing mechanism (the “Pricing Mechanism”) will calculate the values of DuPont common stock and N&B common stock by reference to a simple arithmetic average of daily VWAPs over the three Valuation Dates. The per-share values for DuPont common stock will be determined by DuPont by reference to the simple arithmetic average of the daily VWAP of DuPont common stock on the NYSE over the three Valuation Dates. Similarly, the per-share values for N&B common stock will be determined by DuPont by reference to the simple arithmetic average of the daily VWAP of IFF common stock on the NYSE over the Valuation Dates (since each share of N&B common stock will be exchanged for approximately one share of IFF common stock in the Merger). If the Exchange Offer is extended, the Valuation Dates will reset to the period of three consecutive trading days ending on and including the second trading day preceding the revised expiration date, as may be extended. The final exchange ratio will be announced by press release and be available on the website www.dupontexchangeoffer.com, in each case by 11:59 p.m., New York City time, at the end of the second trading day preceding the expiration of the Exchange Offer, as may be extended, and therefore provides for a two business day window between pricing and Exchange Offer’s expiration. See “The Exchange Offer—Terms of the Exchange Offer—Pricing Mechanism.”

As the Pricing Mechanism results in the final exchange ratio being fixed two business days before the expiration of the Exchange offer, the value of DuPont common stock and IFF common stock may change after the final exchange ratio is fixed by the Pricing Mechanism. The difference between the changing prices of publicly traded DuPont common stock and IFF common stock and the fixed exchange ratio could allow for investors to engage in arbitrage trading during the final two business days prior to the expiration of the Exchange Offer, which could affect the price of DuPont common stock, IFF common stock or both. Such trading could impact the value of the consideration received by holders of DuPont common stock participating in the Exchange Offer.

Arbitrage trading during the Exchange Offer could adversely impact the price of IFF common stock.

The shares of N&B common stock to be received by holders of DuPont common stock who validly tender such stock in the Exchange Offer will be issued at a discount to the per-share value of IFF common stock. During the Exchange Offer, the existence of this discount could negatively affect the market price of IFF common stock. See “The Exchange Offer—Terms of the Exchange Offer—General.” Prospective buyers of IFF common stock could choose to acquire shares of IFF common stock indirectly by purchasing shares of DuPont common stock and then tender such shares in the Exchange Offer. Additionally, certain market participants may use a hedging strategy to

 

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manage risk in the context of split-off transactions that involves shorting IFF common stock. Both occurrences, or either individually, could result in a decrease in the price of IFF common stock during the Exchange Offer. See “The Exchange Offer—Terms of the Exchange Offer—General.”

DuPont stockholders’ investment will be subject to different risks after the Exchange Offer regardless of whether they elect to participate in the Exchange Offer.

 

   

If DuPont stockholders tender all of their shares of DuPont common stock and such shares are accepted and the Exchange Offer is not oversubscribed, then they will no longer have an interest in DuPont, but instead they will directly own an interest in IFF. As a result, their investment will be subject exclusively to risks associated with IFF and not risks associated solely with DuPont.

 

   

If DuPont stockholders tender all of their shares of DuPont common stock and the Exchange Offer is oversubscribed, then the offer will be subject to the proration procedures described below and, unless their odd-lot tender is not subject to proration, such DuPont stockholders will own an interest in both DuPont and IFF. As a result, their investment will be subject to risks associated with both DuPont and IFF.

 

   

If DuPont stockholders exchange some, but not all, of their shares of DuPont common stock, then regardless of whether the Exchange Offer is fully subscribed, the number of shares of DuPont common stock they own will decrease (unless they otherwise acquire shares of DuPont common stock), while the number of shares of N&B common stock, and therefore effectively shares of IFF common stock, they own will increase. As a result, their investment will be subject to risks associated with both DuPont and IFF.

 

   

In addition to the consequences of the Exchange Offer described above, all DuPont stockholders that remain stockholders of DuPont following the completion of the Exchange Offer will receive shares of N&B common stock (which will be converted into shares of IFF common stock in the Merger (although they may instead receive only cash in lieu of a fractional share)) when DuPont completes the expected Clean-Up Spin-Off. As a result, their investment may be subject to risks associated with both DuPont and IFF.

Whether or not DuPont stockholders tender their shares of DuPont common stock, any DuPont shares they hold after the completion of the Exchange Offer will reflect a different investment from the investment they previously held because DuPont will no longer own the N&B Business.

Risks Related to the Combined Company’s Business Following the Transactions

Sales of IFF common stock after the Transactions may negatively affect the market price of IFF common stock.

The shares of IFF common stock to be issued in the Transactions to holders of shares of N&B common stock will generally be eligible for immediate resale. The market price of IFF common stock could decline as a result of sales of a large number of shares of IFF common stock in the market after the consummation of the Transactions or even the perception that these sales could occur.

It is expected that the IFF common stock outstanding on a fully-diluted basis immediately prior to the Transactions will represent, in the aggregate, approximately 44.6% of IFF common stock outstanding on a fully diluted basis immediately following the Transactions.

Currently, DuPont stockholders may include index funds that have performance tied to certain stock indices and institutional investors subject to various investing guidelines. Because IFF may not be included in these indices following the consummation of the Transactions or may not meet the investing guidelines of some of these institutional investors, these index funds and institutional investors may decide to or may be required to sell the shares of IFF common stock that they receive in the Transactions. In addition, the investment fiduciaries of

 

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DuPont’s defined contribution plans may decide to sell any shares of IFF common stock that the trusts for these plans receive in the Transactions, or may decide not to participate in the Exchange Offer, in response to their fiduciary obligations under applicable law. These sales, or the possibility that these sales may occur, may also make it more difficult for IFF to obtain additional capital by selling equity securities in the future at a time and at a price that it deems appropriate.

The historical financial information of the N&B Business may not be representative of its results or financial condition if it had been operated independently of DuPont and, as a result, may not be a reliable indicator of its future results.

The N&B Business is currently operated by DuPont. Consequently, the financial information of the N&B Business included in this prospectus has been derived from the combined financial statements and accounting records of the N&B Business and reflects all direct costs as well as assumptions and allocations made by management of DuPont. The financial position, results of operations and cash flows of the N&B Business presented herein may be different from those that would have resulted had the N&B Business been operated independently of DuPont during the applicable periods or at the applicable dates. For example, in preparing the financial statements of the N&B Business, DuPont made allocations of costs and DuPont corporate expenses deemed to be attributable to the N&B Business. However, these costs and expenses reflect the costs and expenses attributable to the N&B Business operated as part of a larger organization and do not necessarily reflect costs and expenses that would be incurred by the N&B Business had it been operated independently or costs and expenses that would be incurred by the combined company. As a result, the historical financial information of the N&B Business may not be a reliable indicator of future results.

The unaudited condensed combined pro forma financial information of IFF and the N&B Business is not intended to reflect what actual results of operations and financial condition would have been had IFF and the N&B Business been a combined company for the periods presented, and therefore these results may not be indicative of the combined company’s future operating performance.

Because IFF will combine with the N&B Business only upon completion of the Transactions, it has no available historical financial information that consolidates the financial results for the N&B Business and IFF. The historical financial statements contained or incorporated by reference in this document consist of the separate financial statements of DuPont, the N&B Business and IFF.

The N&B Business’s historical combined financial statements have been prepared on a “carve-out” basis from DuPont’s consolidated financial statements using the historical results of operations, assets and liabilities of the N&B Business and include allocations of expenses from DuPont. As a result, the N&B Business’s historical financial statements may not necessarily reflect what its financial condition and results of operations would have been had the N&B Business been an independent, stand-alone entity during the period presented.

The unaudited condensed combined pro forma financial information presented in this document is for illustrative purposes only and is not intended to, and does not purport to, represent what the combined company’s actual results or financial condition would have been if the Transactions had occurred on the relevant date. In addition, such unaudited condensed combined pro forma financial information is based in part on certain assumptions regarding the Transactions that IFF believes are reasonable. These assumptions, however, are only preliminary and will be updated only after the consummation of the Transactions. The unaudited condensed combined pro forma financial information has been prepared using the acquisition method of accounting, with IFF considered the accounting acquirer of the N&B Business. Under the acquisition method of accounting, the purchase price is allocated to the underlying tangible and intangible assets acquired and liabilities assumed based on their respective fair values with any excess purchase price allocated to goodwill. The purchase price allocation in the unaudited condensed combined pro forma financial information was based on a preliminary estimate of the fair values of the tangible and intangible assets and liabilities of the N&B Business. In arriving at the preliminary fair value estimates, IFF has considered the input of independent consultants based on a preliminary and limited

 

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review of the assets and liabilities related to the N&B Business to be transferred to, or assumed by, N&B in the Transactions. Following the effective date of the Transactions, IFF expects to complete the fair valuation of the N&B Business’s assets and liabilities at the level of detail necessary to finalize the required purchase price allocation. The final purchase price allocation may be different than that reflected in the pro forma purchase price allocation presented herein, and this difference may be material. The unaudited condensed combined pro forma financial information also does not reflect the costs of any integration activities or transaction-related costs or incremental capital expenditures that IFF management believes are necessary to realize the anticipated synergies from the Transactions. Accordingly, the pro forma financial information included in this document does not reflect what IFF’s results of operations or operating condition would have been had IFF and the N&B Business been a consolidated entity during all periods presented, or what the combined company’s results of operations and financial condition will be in the future.

IFF may be unable to provide (or obtain from third-parties) the same types and level of services to the N&B Business that historically have been provided by DuPont, or may be unable to provide (or obtain) them at the same cost.

As a separate reporting segment of DuPont, the N&B Business has been able to receive services from DuPont. Following the Transactions, IFF will need to replace these services either by providing them internally from IFF’s existing services or by obtaining them from unaffiliated third parties. These services include certain corporate level functions of which the effective and appropriate performance is critical to the operations of the N&B Business and the combined company following the Merger. While DuPont will provide certain services on a transitional basis pursuant to the Transition Services Agreements, the duration of such services is generally limited to no longer than three years from the date of the Separation for information technology services and no longer than two years from the date of the Separation for all other services. IFF may be unable to replace these services in a timely manner or on terms and conditions as favorable as those the N&B Business currently receives from DuPont. The costs for these services could in the aggregate be higher than the combination of IFF’s current costs and those reflected in the historical financial statements of the N&B Business. If IFF is not able to replace the services provided by DuPont or is unable to replace them at the same cost or is delayed in replacing the services provided by DuPont, the combined company’s results of operations may be materially adversely impacted.

The combined company’s business, financial condition and results of operations may be adversely affected following the Transactions if IFF cannot negotiate terms that are as favorable as those DuPont has received when IFF replaces contracts after the closing of the Transactions.

As a separate reporting segment of DuPont, the N&B Business has been able to receive benefits from being a part of DuPont and has been able to benefit from DuPont’s financial strength, extensive business relationships and purchasing power. Following the Merger, the N&B Business will be combined with IFF, and the combined company will not be able to leverage DuPont’s financial strength, may not have access to all of DuPont’s extensive business relationships and may not have purchasing power similar to what the N&B Business benefited from by being a part of DuPont prior to the Merger. In addition, some contracts that DuPont or its subsidiaries are a party to on behalf of the N&B Business require consents of third parties to assign them to N&B in connection with the Transactions. There can be no assurance that DuPont, N&B or IFF will be able to obtain those consents or enter into new agreements with respect to those contracts if consents are not obtained. It is therefore possible, whether as a result of routine renegotiations of terms in the ordinary course of business, or as part of a request for consent or a replacement of a contract where consent has not been obtained, that the combined company may not be able to negotiate terms as favorable as those DuPont has received previously for one or more contracts, and in the aggregate it is possible that the loss or renegotiation of contracts in connection with the foregoing could adversely affect the combined company’s business, financial condition and results of operations following the closing of the Transactions by increasing costs or decreasing revenues.

 

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As of the date hereof, neither N&B nor IFF expects that the failure to obtain a consent for any individual contract with a customer or supplier where such consent is required in connection with the Transactions would materially affect the combined company’s business, financial condition and results of operations following the closing of the Transactions.

The integration of the N&B Business with IFF may present significant challenges, and the combined company may not realize anticipated synergies and other benefits of the Transaction.

The combination of independent businesses is complex, costly and time-consuming, and combining IFF and the N&B Business’s practices and operations may divert significant management attention and resources and disrupt the combined company’s business. The failure to meet the challenges involved in integrating the businesses and to realize the anticipated benefits of the transaction could cause an interruption of, or a loss of momentum in, the combined company’s business activities and could adversely affect its results of operations. The overall combination of the IFF business and the N&B Business may also result in material unanticipated problems, expenses, liabilities, competitive responses, and loss of customer and other business relationships. The risks and difficulties of integration include, among others:

 

   

the diversion of management attention to integration matters;

 

   

integrating operations and systems, including intellectual property and communications systems, administrative and information technology infrastructure and financial reporting and internal control systems, some of which may prove to be incompatible;

 

   

conforming standards, controls, procedures and accounting and other policies, business cultures and compensation structures between the businesses;

 

   

integrating employees and attracting and retaining key personnel, including talent;

 

   

retaining existing, and obtaining new customers and suppliers;

 

   

managing the expanded operations of a significantly larger and more complex company;

 

   

realizing contingent liabilities that are larger than expected; and

 

   

potential unknown liabilities, adverse consequences and unforeseen increased expenses associated with the transaction.

Many of these factors are outside of IFF’s control and/or will be outside the control of the N&B Business, and any one of them could result in lower revenues, higher costs and diversion of management time and energy, which could materially impact the business, financial condition and results of operations of the combined company’s business.

In addition, even if the operations of the IFF business and the N&B Business are integrated successfully, the full benefits of the transaction may not be realized, including, among others, the synergies, cost savings or sales or growth opportunities that are expected. These benefits may not be achieved within the anticipated time frame or at all. Further, additional unanticipated costs may be incurred in the integration of the IFF business and the N&B Business. All of these factors could cause dilution to the earnings per share of IFF, decrease or delay the projected accretive effect of the transaction, and negatively impact the price of IFF common stock following the transaction.

The success of the combined company will also depend on relationships with third parties and pre-existing customers of IFF and the N&B Business, which relationships may be affected by customer or third-party preferences or public attitudes about the Transactions. Any adverse changes in these relationships could adversely affect the combined company’s business, financial condition or results of operations.

The combined company’s success will depend on its ability to maintain and renew relationships with pre-existing customers, suppliers and other third parties of both IFF and the N&B Business, and its ability to establish new

 

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relationships. There can be no assurance that the business of the combined company will be able to maintain and renew pre-existing contracts and other business relationships, or enter into or maintain new contracts and other business relationships, on acceptable terms, if at all. The failure to maintain important business relationships could have a material adverse effect on the combined company’s business, financial condition or results of operations.

The combined company will have a substantial amount of indebtedness following the Transactions, which could materially adversely affect its financial condition.

The combined company’s level of indebtedness will increase as a result of the Transactions. As of September 30, 2020, IFF had $4,331.7 million of indebtedness outstanding (of which $3,890.8 million was long-term indebtedness), and as of September 30, 2020 on a pro forma basis after giving effect to the Transactions, the combined company would have had $12,040.1 million of indebtedness outstanding (of which $11,599.1 million would have been long-term indebtedness). In connection with the Transactions, N&B will be the initial borrower of up to $1.25 billion under a 3-year/5-year senior unsecured term loan facility and is the initial issuer of senior unsecured notes in an aggregate principal amount of $6.25 billion, which will be used to finance the Special Cash Payment to DuPont in connection with N&B’s separation from DuPont and to pay related fees and expenses. Following the consummation of the Transactions, all obligations of N&B with respect to the Term Loan Facility and the Notes will be guaranteed by IFF or at the election of N&B and IFF, IFF may assume these N&B obligations. IFF and N&B expect that IFF will assume such N&B obligations after the Second Merger. In addition, following the Merger, by virtue of the fact N&B will be a wholly owned subsidiary of IFF, the consolidated indebtedness of IFF and its subsidiaries will include the indebtedness incurred by N&B in the debt financings completed prior to the Distribution (See “Debt Financing”). In addition, in connection with the acquisition of Frutarom, IFF had incurred approximately $3.3 billion of debt, thereby significantly increasing IFF’s leverage. Despite its level of indebtedness, the combined company expects to continue to have the ability to borrow additional debt.

There may be circumstances in which required payments of principal and/or interest on the combined company’s debt could adversely affect its cash flows, its operating results or its ability to return capital to its stockholders. Furthermore, the combined company’s degree of leverage could adversely affect the combined company’s future credit ratings. If the combined company is unable to maintain or improve IFF’s current investment grade rating, it could adversely affect its future cost of funding, liquidity and access to capital markets. In addition, the combined company’s level of leverage could increase its vulnerability to sustained, adverse macroeconomic weakness and limit its ability to obtain further financing, its ability to pursue certain operational and strategic opportunities, including large acquisitions, and its ability to comply with financial and other covenants under its debt instruments. The Term Loan Facility (as amended by that certain Amendment No. 1 to the Credit Agreement, dated as of August 25, 2020) contains a financial covenant requiring maintenance of a maximum consolidated leverage ratio of 4.75 to 1.00 until and including the end of the third full fiscal quarter after the closing date of the Merger, stepping down to 4.50 to 1.00 until and including the end of the sixth full fiscal quarter after the closing date of the Merger, stepping down further to 3.75 to 1.00 until and including the end of the ninth full fiscal quarter after the closing date of the Merger and stepping down further to 3.50 to 1.00 thereafter, with a step-up in connection with certain qualifying acquisitions. If, after borrowing under the Term Loan Facility, the combined company fails to satisfy any of the financial or other restrictive covenants, or otherwise defaults under this facility, the borrowings under the facility could be declared immediately due and payable and the facility could be terminated, which will require immediate repayment by the combined company of the borrowed funds and could trigger cross-default provisions in the combined company’s other financings. Further, the cash flow from operations needed for the payment of principal and interest on its debt and to lower its level of leverage may reduce the cash flow available for dividends or stock repurchases. The combined company’s level of indebtedness as well as its failure to comply with covenants under its debt instruments, could adversely affect its business, results of operation, financial condition and the price of its common stock.

Continued or increased turbulence in the United States or international financial markets and economies could also adversely impact the combined company’s ability to replace or renew maturing liabilities on a timely basis

 

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or access the capital markets to meet liquidity and capital expenditure requirements and may result in adverse effects on its business, financial condition and results of operations. As such, the combined company may not be able to obtain financing on favorable terms or at all.

Economic uncertainty may adversely affect demand for the combined company’s products which may have a negative impact on the combined company’s operating results and future growth.

IFF’s flavors and fragrance compounds, IFF’s fragrance, cosmetic active and functional food ingredients and the N&B Business’s ingredients and solutions products are components of a wide assortment of global consumer products throughout the world. Historically, demand for consumer products using these compounds and ingredients was stimulated and broadened by changing social habits and consumer needs, population growth, an expanding global middle-class and general economic growth, especially in emerging markets. The global economy is experiencing substantial recessionary pressures and declines in consumer confidence that are expected to negatively impact economic growth following the COVID-19 pandemic and measures adopted by various governments to address the spread of the disease. A global recessionary economic environment may increase unemployment and underemployment, decrease salaries and wage rates or result in other market-wide cost pressures that will adversely affect demand for consumer products in both developed and emerging markets. In addition, growth rates in the emerging markets have moderated from previous levels. Reduced consumer spending may cause changes in the combined company’s customer orders including reduced demand for IFF’s and the N&B Business’s compounds or ingredients, or order cancellations. The timing of placing of orders and the amounts of these orders are generally at the discretion of the combined company’s customers. Customers may cancel, reduce or postpone orders with the combined company on relatively short notice. Significant cancellations, reductions or delays in orders by customers could affect the combined company’s quarterly results. It is currently anticipated that these challenging economic uncertainties will continue to affect certain of the combined company’s markets during 2020 which could adversely affect the combined company’s sales, profitability and overall operating results.

IFF may not realize all the benefits anticipated from the Frutarom acquisition, which could adversely affect the combined company’s business.

The success of the Frutarom acquisition ultimately depends on IFF’s ability to realize anticipated benefits from the Frutarom acquisition. Since the Frutarom acquisition, IFF has benefited from, and expects to continue to benefit from cost synergies through global footprint optimization across manufacturing, the realization of significant procurement synergies plus organizational and operational efficiencies in overhead expenses. IFF also expects to achieve revenue synergies by leveraging customer relationships across a much broader customer base and cross-selling legacy IFF and Frutarom technology and capabilities. If IFF fails to realize all the benefits that it expects to achieve from the Frutarom acquisition, the combined company’s business could be adversely affected.

The integration of the legacy IFF business and Frutarom’s business is a costly and time-consuming process, and IFF may face significant implementation challenges that will impact its ability to realize the expected benefits from the acquisition, including without limitation:

 

   

potential disruption of, or reduced growth in, IFF’s historical core businesses, due to diversion of management attention as well as financial and other resources from IFF’s historical core business and uncertainty with IFF’s current customer and supplier relationships;

 

   

loss of business as a result of changes in customer and/or competitor behaviors following the Frutarom acquisition, including IFF’s inability to keep certain customer accounts of Frutarom who may be direct competitors to IFF, or IFF’s need to deprioritize its business activities in certain markets based on market conditions;

 

   

difficulties in achieving anticipated cost savings, synergies, business opportunities and growth prospects;

 

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challenges arising from the expansion of IFF’s product offerings into adjacencies with which IFF has limited experience, including functional foods and nutrition;

 

   

the possibility of faulty assumptions underlying expectations regarding the integration;

 

   

coordinating and integrating research and development teams across technologies and products to enhance product development while reducing costs;

 

   

coordinating sales and marketing efforts to effectively position IFF’s capabilities and the direction of product development;

 

   

ensuring regulatory compliance, quality, safety and sustainability standards across an organization of increased scale and complexity;

 

   

retaining and efficiently managing IFF’s significantly expanded and decentralized customer base;

 

   

the assumption of and exposure to unknown or contingent liabilities of Frutarom;

 

   

unanticipated issues or higher than expected costs in consolidating and integrating corporate, information technology, finance and administrative infrastructures, and integrating and harmonizing business systems;

 

   

combining and optimizing IFF’s manufacturing facilities and global supply chain as well as leveraging customer relationships for cross-selling opportunities;

 

   

aligning compliance, quality, as well as safety and sustainability standards across operations;

 

   

aligning processes, policies, procedures, technologies, operations, employee benefits, information technologies and systems across operations;

 

   

difficulties in managing a larger and more complex combined company, addressing differences in business culture and retaining key personnel; and

 

   

managing tax costs or inefficiencies associated with integrating the operations of the combined company.

Some of these factors are outside of IFF’s control and any one of them if not successfully managed could result in increased costs and diversion of management’s time and energy, as well as reputational harm and decreases in the amount of expected revenue which could materially impact IFF’s business, financial condition and results of operations. If the anticipated benefits from the Frutarom acquisition are not fully realized, or take longer to realize than expected, the value of the combined company’s common stock, revenues, levels of expenses and results of operations may be adversely affected.

The Frutarom acquisition resulted, and may continue to result, in significant costs, charges or other liabilities that could adversely affect the financial results of IFF.

Following the acquisition of Frutarom, IFF’s financial results were adversely affected by restructuring charges, cash expenses and non-cash accounting charges incurred in connection with the acquisition. IFF expects to record total pretax restructuring charges related to the Frutarom acquisition of approximately $40 million to $50 million, of which $10.4 million was recorded since closing of the transaction through December 31, 2019, comprised of approximately $6.1 million of severance and related benefit costs; $0.5 million of asset write-downs and write-offs; and $3.7 million of costs associated with exit and disposal activities. In addition, there are many processes, policies, procedures, operations, technologies and systems that are being integrated across IFF’s organization that will result in costs, including financial advisory, tax, information technology, legal, consulting and other professional advisory fees associated with these integration activities. Costs and expenses incurred in connection with the integration limit resources that may otherwise be available for investment in research and development and capital expenditures.

 

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In connection with IFF’s acquisition of Frutarom, IFF assumed all of Frutarom’s liabilities, including unknown and contingent liabilities. Due to the nature of the transaction and the characteristics of Frutarom, IFF’s ability to conduct extensive due diligence was limited and IFF may subsequently identify unknown liabilities, including those that Frutarom assumed in its prior acquisitions that are not currently probable or estimable. Prior to IFF’s acquisition, Frutarom completed 47 acquisitions since 2011, including 22 since the beginning of 2016. If IFF does not properly assess the scope of these liabilities or if these liabilities are neither probable nor estimable at this time, IFF’s future financial results could be adversely affected by unanticipated reserves or charges, unexpected litigation or regulatory exposure, unfavorable accounting charges, unexpected increases in taxes due, a loss of anticipated tax benefits or other adverse effects on IFF’s business, operating results or financial condition.

IFF may fail to realize the expected cost savings and increased efficiencies from or stay within its estimated costs of the Frutarom integration and IFF’s ongoing optimization of its manufacturing facilities may not be as effective as it anticipates.

IFF’s ability to realize anticipated cost savings and synergies from the Frutarom manufacturing rationalization may be affected by a variety of factors which may impose significant risks to IFF and which may be out of IFF’s control, including:

 

   

IFF’s ability to accurately estimate costs in multiple jurisdictions related to the consolidation, updating or closing of manufacturing facilities;

 

   

IFF’s ability to successfully and efficiently manufacture the relocated product lines at a different manufacturing facility;

 

   

IFF’s ability to effectively reduce overhead and integrate and retain employees of the relocated operations;

 

   

difficulties in implementing and maintaining consistent standards, controls, procedures, policies and information systems;

 

   

integrating newly acquired manufacturing, distribution and technology facilities;

 

   

potential strains on IFF’s personnel, systems and resources and diversion of attention from other priorities; and

 

   

unforeseen or contingent liabilities of the relocated operations, including tax liabilities.

Actual charges, costs and adjustments arising from these activities may vary materially from IFF’s estimates, and may require cash and non-cash integration and implementation costs or charges in excess of forecasted amounts, which could offset any such savings and other synergies and therefore could have an adverse effect on IFF’s margins.

Furthermore, as part of IFF’s ongoing strategy, IFF seeks to enhance its manufacturing efficiency and align its geographic manufacturing footprint with its expectations of future growth and technology needs. For example, IFF is in the process of relocating one of its Fragrance Ingredients facilities in China and constructing new facilities in India and Indonesia. In addition, in connection with the Frutarom integration, IFF is consolidating, updating and/or closing manufacturing facilities to achieve synergies and align its manufacturing footprint.

Failure to successfully establish and manage acquisitions, collaborations, joint ventures or partnerships could adversely affect the combined company’s growth.

From time to time, IFF evaluates acquisition candidates that may strategically fit its business and/or growth objectives. If IFF is unable to successfully integrate and develop acquired businesses, the combined company could fail to achieve anticipated synergies and cost savings, including any expected increase in revenues and operating results, which could have a material adverse effect on the combined company’s financial results. IFF may also incur asset impairment charges related to acquisitions that reduce its earnings.

 

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Additionally, IFF also evaluates and enters into collaborations, joint ventures or partnerships from time to time to enhance its research and development efforts or expand its product portfolios and technology. The process of establishing and maintaining collaborative relationships is difficult and time-consuming to negotiate, document and implement. The combined company may not be able to successfully negotiate such arrangements or the terms of the arrangements may not be as favorable as anticipated. Furthermore, the combined company’s ability to generate revenues from such collaborations will depend on its partners’ abilities and efforts to successfully perform the functions assigned to them in these arrangements and these collaborations may not lead to development or commercialization of products in the most efficient manner, or at all. In addition, from time to time, IFF has acquired, and the combined company may acquire, only a majority interest in companies and provided or may provide earnouts for the former owners along with the ability, at IFF’s option, or obligation, at the former owners’ option, to purchase the minority interests at a future date at an established price. These investments may have additional risks and may not be as efficient as other operations as IFF may have fiduciary or contractual obligations to the minority investors and may rely on former owners for the continuing operation of the acquired business. If the combined company is unable to successfully establish and manage these collaborative relationships and majority investments it could adversely affect the combined company’s future growth.

Defects, quality issues, inadequate disclosure or misuse with respect to the products and capabilities of the combined company could adversely affect the business, reputation and financial statements of the combined company.

Defects in, quality issues with respect to or inadequate disclosure of risks relating to the combined company’s products or the misuse of the combined company’s products, could lead to lost profits and other economic damage, property damage, personal injury or other liability resulting in third-party claims, criminal liability, significant costs, damage to its reputation and loss of business. Any of these factors could adversely affect the business, financial condition and results of operations of the combined company.

IFF and the N&B Business operate in a highly competitive industry, and if IFF and the N&B Business are unable to compete effectively the combined company’s sales and results of operations will suffer.

The markets in which IFF and the N&B Business compete are highly competitive. IFF and the N&B Business face vigorous competition from companies throughout the world, including multi-national and specialized flavors, fragrances, nutrition and specialty ingredients companies, as well as consumer product companies which may develop their own flavors, fragrances or ingredients. In the flavors industry, IFF also faces increasing competition from ingredient suppliers that have expanded their portfolios to include flavor offerings. Some of the competitors of IFF and the N&B Business specialize in one or more of the product sub-segments of IFF and the N&B Business, while others participate in many of IFF’s or N&B Business’ product sub-segments. In addition, some of IFF’s and the N&B Business’s global competitors may have more resources than the combined company or may have proprietary products that could permit them to respond to changing business and economic conditions more effectively than the combined company can. Consolidation of IFF’s and the N&B Business’s competitors may exacerbate these risks.

As IFF and the N&B Business continue to enter into adjacent markets, such as cosmetic ingredients, functional foods, specialty fine ingredients and nutrition products, the combined company may face greater competition-related risks in these markets than with IFF’s core historic flavor and fragrances businesses. For example, the specialty fine ingredients market is more price sensitive than the flavors market and is characterized by relatively lower profit margins. Some fine ingredients products are less unique and more replaceable than competitors’ products. There is no assurance that operating margins will remain at current levels, which could substantially impact the combined company’s business, operating results and financial condition.

Competition in IFF’s business and the N&B Business is based, among other things, on innovation, product quality, regulatory compliance, pricing, quality of customer service, the support provided by marketing and

 

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application groups, and understanding of consumers. It is difficult for IFF and the N&B Business to predict the timing, scale and success of their competitors’ actions in these areas. In particular, the discovery and development of new flavors and fragrance compounds and ingredients, protection of IFF’s and the N&B Business’s intellectual property and development and retention of key employees are critical to the ability to effectively compete in the combined company’s business. Advancement in technologies have also enhanced the ability of IFF’s and the N&B Business’s competitors to develop substitutable products. Increased competition by existing or future competitors, including aggressive price competition, could result in the loss of sales, reduced pricing and margin pressure and could adversely impact the combined company’s sales and profitability.

Failing to identify and make capital expenditures to achieve growth opportunities, being unable to make new concepts scalable, or failing to effectively and timely reinvest in the combined company’s business operations, could result in the loss of competitive position and adversely affect the combined company’s financial condition or results of operations.

If the combined company is unable to successfully market to its expanded and diverse Taste customer base, the combined company’s operating results and future growth may be adversely affected.

As a result of IFF’s acquisition of Frutarom, the number of its customers significantly increased and became more diverse. IFF’s historical customer base was primarily comprised of large and medium-sized food, beverage and consumer products companies. As a result of the expansion of IFF’s Tastepoint initiative and the Frutarom acquisition, and based on 2019 sales, IFF currently has approximately 38,000 customers, approximately 65% of which are small and mid-sized companies. This substantial increase in and diversity of IFF’s customer base requires IFF to adjust, among other things, its product development, manufacturing, distribution, marketing, customer relationship and sales strategy as well as adapt corporate, information technology, finance and administrative infrastructures to support different go-to-market models. Following the Transactions, the combined company’s customer base may increase further in number and become more diverse. The combined company may experience difficulty managing the growth of a portfolio of customers that is more diverse in terms of its geographical presence as well as with respect to the types of services they require and the infrastructure required to deliver its products. If the combined company is unable to successfully gain market share or maintain its relationships with these customers, the combined company’s future growth could be adversely affected.

The combined company’s success depends on attracting and retaining talented people within its business. Significant shortfalls in recruitment or retention could adversely affect the combined company’s ability to compete and achieve its strategic goals.

Attracting, developing, and retaining talented employees is essential to the successful delivery of the combined company’s products and success in the marketplace. Furthermore, as IFF and the N&B Business continue to focus on innovation, the combined company’s need for scientists and other professionals will increase. The ability to attract and retain talented employees is critical in the development of new products and technologies which is an integral component of IFF’s growth strategy for the combined company.

Competition for employees can be intense and if the combined company is unable to successfully integrate, motivate and reward the employees from the N&B Business or IFF’s current employees in the combined company, the combined company may not be able to retain them. If the combined company is unable to retain these employees or attract new employees in the future, its ability to effectively compete with its competitors and to grow its business could be adversely affected.

A significant portion of the combined company’s sales are expected to be generated from a limited number of large multi-national customers, which are currently under competitive pressures that may affect the demand for the combined company’s products and profitability.

Some of IFF’s and the N&B Business’s largest customers, several of which are multi-national consumer products companies, collectively, account for a significant portion of IFF’s and the N&B Business’s sales in the aggregate.

 

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Large multi-national customers’ market share, especially in the consumer product industry, continues to be pressured by new smaller companies and specialty players that cater to or are more adept at adjusting to the latest consumer trends, including towards natural products and clean labels, changes in the retail landscape (including e-commerce and consolidation), and increased competition from private labels, which have resulted and may continue to result in decreased demand for our products by such multi-national customers and volume erosion, especially in IFF’s Taste business. Furthermore, consolidations amongst IFF’s and the N&B Business’s customers have resulted in larger and more sophisticated customers with greater buying power and additional negotiating strength. If such trends continue, the combined company’s sales could be adversely impacted if it is not able to replace these sales. In addition, large multi-national customers and, increasingly middle market customers, continue to utilize “core lists” of suppliers to improve margins and profitability. Typically, these “core list” suppliers are then given priority for new or modified products. Recently, these customers are making inclusion on their “core lists” contingent upon a supplier providing more favorable commercial terms, including rebates, which could adversely affect the combined company’s margins. The combined company must either offer competitive cost-in-use solutions to secure and maintain inclusion on these “core lists” or seek to manage the relationship without being on the “core-list.” If the combined company chooses not to pursue “core-list” status due to profitability concerns or if the combined company is unable to obtain “core-list” status, the combined company’s ability to maintain its share of these customers’ future purchases could be adversely affected and therefore the combined company’s future results of operations.

The combined company may not successfully develop and introduce new products that meet its customers’ needs, which may adversely affect the combined company’s results of operations.

The combined company’s ability to differentiate and deliver growth largely depends on the combined company’s ability to successfully develop and introduce new products and product improvements that meet its customers’ needs, and ultimately appeal to its consumers. Innovation is a key element of the combined company’s ability to develop and introduce new products. IFF cannot be certain that it will be successful in achieving its innovation goals, such as the development of new molecules, new and expanded delivery systems and other technologies. Additionally, the N&B Business cannot be certain that it will be successful in achieving its innovation goals. In 2019, IFF spent approximately 6.7% of its sales on research and development; however this investment level may vary in the future if available resources to invest in research and development are limited due to its ongoing integration and restructuring efforts. The combined company’s research and development investments may only generate future revenues to the extent that the combined company is able to develop products that meet its customers’ specifications, are at an acceptable cost and achieve acceptance by its targeted consumer market. Furthermore, there may be significant lag times from the time the combined company incurs research and development costs to the time that these research and development costs may result in increased revenue. Consequently, even when the combined company “wins” a project, its ability to generate revenues as a result of these investments will be subject to numerous customer, economic and other risks that are outside of its control, including delays by its customers in the launch of a new product, the level of promotional support for the launch, poor performance of its third-party vendors, anticipated sales by its customers not being realized or changes in market preferences or demands, or disruptive innovations by competitors.

Natural disasters, public health crises (such as the recent coronavirus outbreak), international conflicts, terrorist acts, labor strikes, political crisis, accidents and other events could adversely affect the combined company’s business and financial results by disrupting development, manufacturing, distribution or sale of the combined company’s products.

As companies engaged in the global development, manufacture and distribution of products, IFF and the N&B Business are subject to the risks inherent in such activities, including industrial accidents, environmental events, strikes and other labor disputes, product quality control issues, safety, licensing requirements and other regulatory issues, as well as natural disasters, public health crises, such as pandemics or epidemics, international conflicts, terrorist acts and other external factors over which IFF and the N&B Business have no control.

 

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While IFF and the N&B Business operate research and development, manufacturing and distribution facilities throughout the world, many of these facilities are extremely specialized and certain of IFF’s and the N&B Business’s research and development or creative laboratories facilities are uniquely situated to support IFF’s and the N&B Business’s research and development efforts while certain of IFF’s and the N&B Business’s manufacturing facilities are the sole location where a specific ingredient or product is produced. If IFF’s or the N&B Business’s research and development activities or the manufacturing of ingredients or products were disrupted, the cost of relocating or replacing these activities or reformulating these ingredients or products may be substantial, which could result in production or development delays or otherwise have an adverse effect on the combined company’s margins, operating results and future growth.

The extent to which the novel coronavirus (COVID-19), and measures taken in response to it, impact the N&B Business, its results of operations and its financial condition depends on future developments, which are highly uncertain and cannot be predicted.

The management of the N&B Business is actively monitoring the global impacts of COVID-19, including the impacts from responsive measures, and remains focused on its top priorities—the safety and health of its employees and the needs of its customers. The business and financial condition of the N&B Business, and the business and financial condition of its customers and suppliers, have been impacted by the significantly increased economic and demand uncertainties created by the COVID-19 outbreak. In addition, public and private sector responsive measures, such as the imposition of travel restrictions, quarantines, adoption of remote working, and suspension of non-essential business and government services, have impacted the N&B Business. Many of the facilities and employees of the N&B Business are based in areas impacted by the virus. The N&B Business’s manufacturing sites are operating, although in some instances, the N&B Business has reduced or furloughed certain operations in response to government measures, employee welfare concerns and the impact of COVID-19 on the global demand and supply chain. For example, the N&B Business’s manufacturing plants and offices in India were required to reduce operations as a result of government measures taken to contain the outbreak. The manufacturing operations of the N&B Business may be further adversely affected by impacts from COVID-19 including, among other things, additional government actions and other responsive measures, more and /or deeper supply chain disruptions, quarantines and health and availability of essential onsite personnel.

During the first nine months of 2020, N&B benefited from COVID-19 related demand in certain markets, principally health & wellness and home care markets as there was increased focus on health, immunity and cleanliness in response to COVID-19. During the same period, N&B experienced COVID-19 related declines in demand from food service distribution channels and for products for the oil and gas and select industrial end-markets, including for biorefinery and microbial controls. N&B expects these trends to continue into the fourth quarter 2020. COVID-19 also continues to adversely impact the broader global economy, and the management of the N&B Business is unable to predict the extent of COVID-19 related impacts on the business, results of operations, and financial condition on the N&B Business which depend on highly uncertain and unpredictable future developments, including, but not limited to, the duration and spread of the COVID-19 outbreak, its severity, the actions to contain the virus or treat its impact, and how quickly and to what extent normal economic and operating conditions resume. The financial results of the N&B Business may be materially and adversely impacted by a variety of factors that have not yet been determined. In addition, until the consummation of the Transactions, the N&B Business will remain a part of DuPont. DuPont is taking actions, including reducing costs, restructuring actions, and delaying certain capital expenditures and non-essential spend, and may consider further reductions in or furloughing additional operations in response to further and/or deeper declines in demand and/or supply chain disruptions. There can be no guaranty that such actions will not also impact the N&B Business and there can be no guaranty that such actions will significantly mitigate the impact of COVID-19 on the business, results of operations or financial condition of the N&B Business. In addition, as a part of DuPont, the N&B Business relies on DuPont for access to capital. As COVID-19 continues to adversely impact the broader global economy, including negatively impacting economic growth and creating disruption and volatility in the global financial and capital markets, which increases the cost of capital and adversely impacts the availability of and access to capital, this could negatively affect DuPont’s liquidity, which could in turn

 

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negatively affect the business, results of operations and financial condition of the N&B Business. After the COVID-19 outbreak has subsided, the N&B Business may experience adverse impacts to its business, results of operations and financial condition as a result of related global economic impacts, including any recession that has occurred or may occur in the future, and such adverse impacts may be material.

The COVID-19 pandemic may materially and adversely impact IFF’s operations, financial condition, results of operations and cash flows.

COVID-19 was identified in China in late 2019 and has spread globally. Government authorities, including those in countries where IFF has manufacturing and other operations, have taken various measures to try to contain this spread, such as the closure of non-essential businesses, reduced travel, the closure of retail establishments, the promotion of social distancing and remote working policies where appropriate. These measures have impacted and may further impact IFF’s workforce and operations, and the operations of its customers, vendors and suppliers.

The COVID-19 pandemic has subjected IFF’s operations, financial condition and results of operations to a number of risks, including, but not limited to, those discussed below:

 

   

Operations-related risks: IFF’s manufacturing plants continue to operate world-wide in compliance with the orders and restrictions imposed by government authorities in each of IFF’s locations, and IFF is working with its customers to meet their specific shipment needs. Most plants have restored operations to historical levels, notwithstanding that certain restrictions imposed to achieve social distancing remain in place. Some of IFF’s R&D and creative applications centers are operating on limited schedules or with a reduced workforce of essential employees as a result of certain safety measures implemented by IFF to limit the number of the on-site workforce.

The ability of IFF to continue to supply its products is highly dependent on its ability to maintain the safety of its workforce. The ability of employees to work may be significantly impacted by individuals contracting or being exposed to COVID-19, and IFF’s operations and financial results may be negatively affected as a result. IFF has developed return-to-workplace protocols and mandatory site guidelines to continue to protect the health and safety of employees at each location and to promote an orderly and phased return for employees who have been working from home. While IFF is following the requirements of governmental authorities and taking additional preventative and protective measures to ensure the safety of its workforce, there can be no assurance that these measures will be successful, and to the extent that employees in IFF’s manufacturing or distribution centers contract COVID-19, IFF may be required to temporarily close those facilities, which may result in reduced production hours, more rigorous cleaning processes and other preventative and protective measures for employees. Workforce disruptions of this nature may significantly impact IFF’s ability to maintain its operations and may adversely impact its financial results.

Resolving such operational challenges has increased certain costs, such as labor, shipping, and cleaning, and the failure to resolve such challenges may result in IFF’s inability to deliver products to its customers and reduce sales.

 

   

Supply chain-related risks: IFF has experienced some disruption, primarily regarding distribution of certain raw materials and transport logistics in markets where governments have implemented the strictest regulations. More significant disruptions may occur if the COVID-19 pandemic continues to impact markets around the world. In addition, as a result of disruptions to IFF’s supply chain, IFF is experiencing, and may continue to experience, increased costs for raw materials, shipping and transportation resources, which has negatively impacted, and may continue to negatively impact, IFF’s margins and operating results.

 

   

Customer-related risks: IFF is experiencing, and may continue to experience, changes in the demand and volume for certain of its products, including due to consumption or stocking behavior changes. For example, ingredients used in products sold mainly in retail outlets, such as fine fragrances or taste

 

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products used in retail food services, have seen a decrease in demand as these outlets have closed due to COVID-19 related restrictions. In addition, IFF has received requests for extensions in payment terms from some customers in select markets whose products are experiencing reduced demand.

Although IFF does not currently anticipate any impairment charges related to COVID-19, the continuing effects of a prolonged pandemic could result in increased risk to IFF of asset write-downs and impairments, including, but not limited to, equity investments, goodwill and intangibles. Any of these events could potentially result in a material adverse impact on IFF’s business and results of operations.

 

   

Market-related risks: The funding obligations for IFF’s pension plans will be impacted by the performance of the financial markets, particularly the equity markets and interest rates. Lower interest rates and lower expected asset valuations and returns can materially impact the calculation of long-term liabilities such as pension liabilities. In addition, the volatility in financial and commodities markets may have adverse impacts on other asset valuations such as the value of the investment portfolios supporting pension obligations. If the financial markets do not provide the long-term returns that are expected, IFF could be required to make larger contributions.

In addition to the risks noted above, COVID-19 may also heighten other risks described in IFF’s Annual Report on Form 10-K for the year ended December 31, 2019, including, but not limited to, risks related to a decrease in global demand for consumer products, manufacturing disruptions, disruption in the supply chain, price volatility for raw materials, level of indebtedness, currency fluctuations and impairment of long-lived assets. Further, the magnitude of the impact of the COVID-19 pandemic, including the extent of its impact on IFF’s operating and financial results, will be determined by the length of time that the pandemic continues, and while government authorities’ measures relating to COVID-19 may be relaxed if and when COVID-19 abates, these measures may be reinstated as the pandemic continues to evolve. The scope and timing of any such reinstatements are difficult to predict and may materially impact IFF’s operations in the future. As COVID-19 continues to adversely impact the broader global economy, including negatively impacting economic growth and creating disruption and volatility in the global financial and capital markets, which increases the cost of capital and adversely impacts the availability of and access to capital, this could negatively affect IFF’s liquidity, which could in turn negatively affect IFF’s business, results of operations and financial condition. The COVID-19 pandemic may also affect IFF’s operating and financial results in a manner that is not presently known to IFF or that IFF currently does not expect to present significant risks.

The COVID-19 pandemic may adversely impact the combined company’s operations, financial condition, results of operations and cash flows. The extent of such impact, which may be material, depends on future developments, which are highly uncertain and cannot be predicted.

Other than those risks related to the N&B Business currently being a part of DuPont, any of the risks noted above with respect to the impact of the COVID-19 pandemic on each of IFF and the N&B Business, individually, could result in an adverse impact on the combined company’s operations, financial condition, results of operations and cash flows. In addition to the risks noted above with respect to IFF and the N&B Business, individually, the impacts of COVID-19 may also heighten other risks described in “Risks Related to the Combined Company’s Business Following the Transactions”, including, but not limited to, risks related to a decrease in global demand for consumer products, manufacturing disruptions, disruption in the supply chain, price volatility for raw materials, level of indebtedness, currency fluctuations and impairment of long-lived assets. As a general matter, the business and financial condition of the combined company may be impacted by the COVID-19 outbreak, including, but not limited to, as a result of significantly increased economic and demand uncertainties created by the COVID-19 outbreak, impacts on its customers and suppliers, and public and private sector responsive measures, such as the imposition of travel restrictions, quarantines, adoption of remote working, and suspension of non-essential business and government services. Further, the magnitude of the impact on the combined company from the economic impacts of COVID-19 (as well as the impact on the combined company from measures by government authorities to try to contain its spread), including the extent of any impact on the

 

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combined company’s operating and financial results, will be determined by the length of time that the pandemic and its economic effects continue, the evolving response of government authorities (which may relax measures relating to COVID-19 if and when COVID-19 abates, but then reinstate measures as the pandemic continues to evolve) and how quickly and to what extent normal economic and operating conditions resume. In particular, the scope and timing of any reinstatement by government authorities of measures to contain the spread of the virus, and the timing of and the extent to which normal economic and operating conditions will resume, are generally difficult to predict, and any reinstatement of measures to contain the spread of the virus by government authorities or delay in a return to normal economic and operating conditions may materially impact the combined company’s operations in the future. The COVID-19 pandemic may also impact the combined company’s operating and financial results in a manner that is not presently known to us or that we currently do not expect to present significant risks.

A disruption in the combined company’s supply chain, including the inability to obtain ingredients and raw materials from third parties, could adversely affect the combined company’s business and financial results.

In connection with IFF’s and the N&B Business’s manufacture of their fragrance and flavor products, IFF and the N&B Business often rely on third party suppliers for ingredients and raw materials that are integral to their manufacture of such compounds. IFF’s and the N&B Business’s purchases of raw materials are subject to fluctuations in market price and availability caused by weather conditions, climate change, as further discussed below, market conditions, governmental actions and other factors beyond the control of IFF and the N&B Business affecting IFF, the N&B Business and/or their suppliers. Import alerts or specific country regulations may impair or delay the combined company’s ability to obtain sufficient quantity of certain ingredients, raw materials and naturals at the relevant manufacturing facility. In addition, IFF’s and the N&B Business’s ingredient or raw material suppliers are subject to risks, as applicable, inherent in agriculture, manufacturing and distribution on a global scale, including industrial accidents, environmental events, strikes and other labor disputes, disruptions in supply chain or information systems, disruption or loss of key research or manufacturing sites, product quality control, safety and environmental compliance issues, licensing requirements and other regulatory issues, as well as natural disasters, global or local health crisis, international conflicts, terrorist acts and other external factors over which they have no control. For example, as a result of the outbreak of COVID-19, the ability of IFF’s and the N&B Business’s suppliers and vendors to provide products and services to IFF and the N&B Business may be impaired or delayed. These suppliers also could become insolvent or experience other financial distress. For example, in 2017, a fire at the manufacturing facility of BASF Group (“BASF”), one of IFF’s suppliers, caused them to declare a force majeure and has resulted in industry disruption due to the lack of availability of certain ingredients used in many fragrance compounds.

These risks are enhanced since IFF and the N&B Business often rely on a limited number of suppliers for particular ingredients. If the combined company’s suppliers are unable to supply the combined company with sufficient quantities of ingredients and raw materials to meet its needs, the combined company would need to seek alternative sources of such materials or pursue its own production of such ingredients or direct acquisition of such raw materials. However, for certain of IFF’s and the N&B Business’s ingredients and raw materials they rely on a limited number of suppliers where there are not readily available alternatives. If the combined company is unable to obtain or manufacture alternative sources of such ingredients or raw materials at a similar cost, the combined company would seek to (i) reformulate its compounds and/or (ii) increase pricing to reflect the higher supply cost. However, if the combined company is not able to successfully implement any of these alternatives, the combined company could experience disruptions in production, increased cost of sales and a corresponding decrease in gross margin or reduced sales, especially if its competitors were able to more successfully adjust to such market disruption. At the same time, industry-wide supply disruptions, such as the one caused by the BASF incident, may lead to broader market shortages and sales volatility. There is uncertainty regarding the impact that such fluctuations and decrease in gross margin could have on the combined company, but it could have an adverse effect on the combined company’s business, results of operations and financial condition.

 

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Volatility and increases in the price of raw materials, energy and transportation, including due to climate change, could harm the combined company’s profits.

IFF uses many different raw materials for their businesses, particularly natural products, including essential oils, extracts and concentrates derived from fruits, vegetables, flowers, woods and other botanicals, animal products, raw fruits, organic chemicals and petroleum-based chemicals. The major commodities, raw materials and supplies for the N&B Business include: gelatin, glycols, cellulose processed grains (including dextrose and glucose), guar, locust bean gum, organic vegetable oils, peels, saccharides, seaweed, soybeans, and sugars and yeasts. IFF and the N&B Business have experienced price volatility with respect to raw materials. For example, there has been industry-wide price volatility of certain ingredients used in fragrance compounds due to the BASF incident and in 2019 IFF experienced increases in the prices of certain naturals. In addition, in connection with the outbreak of COVID-19, IFF and the N&B Business may experience price volatility of certain raw materials as a result of restrictions on travel and movement and other measures enacted by countries around the world to contain the spread of COVID-19.

Natural products represent approximately half of IFF’s raw material spend, and IFF expects such volatility to continue in the near future. In addition, because the combined company offers a substantial number of natural product offerings and often relies on a limited number of suppliers for certain products, this risk may be exacerbated. There is growing evidence that carbon dioxide and other greenhouse gases in the atmosphere may have an adverse impact on global temperatures, weather and precipitation patterns, growing and harvesting conditions, and the frequency and severity of extreme weather and natural disasters, such as floods, wildfires, droughts and water scarcity. To the extent such climate change effects have a negative impact on crop size and quality, it could impact the availability and pricing of these natural products. If the combined company is unable to increase the prices to the customers of its products to offset raw material and other input cost increases, or if the combined company is unable to achieve cost savings to offset such cost increases, the combined company could fail to meet its cost expectations and its profits and operating results could be adversely affected. Increases in prices of the combined company’s products to customers may lead to declines in sales volumes, and the combined company may not be able to accurately predict the volume impact of price increases, which could adversely affect the combined company’s financial condition and results of operations.

Similarly, commodities and energy prices are subject to significant volatility caused by, among other things, market fluctuations, supply and demand, currency fluctuations, production and transportation disruptions, climate change and weather conditions, and other world events. As IFF and the N&B Business source many of their raw materials globally to help ensure quality control, if the cost of energy, shipping or transportation increases and the combined company is unable to pass along these costs to its customers, profit margins would be adversely affected. A majority of the revenue generated by N&B Business’s Pharma Solutions segment, and to a lesser extent, the Food & Beverage and Health & Biosciences segments, is pursuant to contracts which are subject to renewal annually or allow price to be adjusted annually under certain circumstances, including changes in raw material costs. Furthermore, increasing the combined company’s prices to its customers could result in long-term sales declines or loss of market share if its customers find alternative suppliers or choose to reformulate their consumer products to use fewer ingredients, which could have an adverse long-term impact on the combined company’s results of operations. The combined company’s ability to price its products competitively to timely reflect volatility in prices of raw material and ingredients is critical to maintain and grow its sales. If the combined company does not accurately estimate the amount of raw materials that will be used for the geographic region in which it will need these materials or competitively price its products, the combined company’s margins could be adversely affected.

A significant data breach or other disruption to the combined company’s information technology systems could disrupt its operations, result in the loss of confidential information or personal data, and adversely impact the combined company’s reputation, business or results of operations.

IFF and the N&B Business rely on information technology systems, including some managed by third-party providers, to conduct business and support their business processes, including those relating to product formulas,

 

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product development, manufacturing, sales, order and invoice processing, production, distribution, internal communications and communications with third parties throughout the world, processing transactions, summarizing and reporting results of operations, complying with regulatory, tax or legal requirements, and collecting and storing customer, supplier, employee and other stakeholder information. Cyber security incidents, data breaches and operational disruptions caused by cyberattacks or cyber-intrusions are constantly evolving in nature, becoming more sophisticated and are being made by groups and individuals with a wide range of expertise and motives including computer hackers, foreign governments, cyber terrorists, cyber criminals and malicious employees or other insiders. IFF, the N&B Business and their third-party providers are subject to risks posed by such incidents, which can take many forms, including code anomalies, “Acts of God,” data leakage, hardware or software failures, human error, cyber extortion, password theft or introduction of viruses, malware, ransomware, including through phishing emails.

A disruption to the combined company’s information technology systems could result in the loss of confidential business, customer, supplier or employee information, litigation or fines and may require substantial investigations, repairs or replacements, or impact the combined company’s ability to summarize and report financial results in a timely manner, resulting in significant financial, legal, and relational costs and potentially harming the combined company’s reputation and adversely impacting its operations, customer service and results of operations. As the combined company works on upgrading and integrating N&B’s and Frutarom’s systems, these risks may be exacerbated. Additionally, a security or data breach could require the combined company to devote significant management and financial resources to address the problems created, and, as a result of the private rights of action provided for under the EU’s General Data Protection Regulation (the “GDPR”), the California Consumer Privacy Act (the “CCPA”) and other laws relating to data protection and privacy in other jurisdictions, in the event of such breaches, additional private litigation against the combined company may result. These types of adverse impacts could also occur in the event the confidentiality, integrity or availability of company, customer, supplier or employee information are compromised due to a data loss by the combined company or a trusted third party. The combined company or the third parties with which the combined company shares information may not discover any such incidents and loss of information for a significant period of time after the incident occurs. While IFF and the N&B Business have security processes and initiatives in place, the combined company may be unable to detect or prevent a breach or disruption in the future. Additionally, while IFF has, and the combined company will have, insurance coverage designed to address certain aspects of cyber risks in place, such insurance coverage may be insufficient to cover all losses or all types of claims that may arise.

If the combined company fails to comply with data protection laws in the U.S. and abroad, it may be subject to fines, penalties and other costs.

Recently, there has also been heightened regulatory and enforcement focus on data protection in the U.S. (at both the state and federal level) and abroad, and an actual or alleged failure to comply with applicable U.S. or foreign data protection regulations or other data protection standards may expose the combined company to litigation (including, in some instances, class action litigation), fines, sanctions or other penalties, which could harm the combined company’s reputation and adversely impact its business, results of operations and financial condition. This regulatory environment is increasingly challenging and may present material obligations and risks to the combined company’s business, including significantly expanded compliance burdens, costs and enforcement risks. For example, the European Union’s GDPR, which became effective in May 2018, greatly increases the jurisdictional reach of EU law and adds a broad array of requirements related to personal data, including individual notice and opt-out preferences and the public disclosure of significant data breaches. Additionally, violations of the GDPR can result in fines of as much as 4% of a company’s annual revenue. Other governments have enacted or are enacting similar data protection laws, including data localization laws that require data to stay within their borders. As of 2020, IFF and the N&B Business are also required to comply with certain additional requirements under the CCPA, which requires companies that process information on California residents to make new disclosures to consumers about their data collection, use and sharing practices, provide consumers with rights to access and delete information relating to them and allow consumers to opt out of certain data sharing with third parties. All of these evolving compliance and operational requirements, as well as the

 

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uncertain interpretation and enforcement of laws, impose significant costs and regulatory risks that are likely to increase over time. The combined company’s failure to comply with these evolving regulations could expose it to fines, penalties and other costs that could adversely impact its financial results.

If the combined company is unable to comply with regulatory requirements and industry standards, including those regarding product safety, quality, efficacy and environmental impact, the combined company could incur significant costs and suffer reputational harm which could adversely affect results of operations.

The development, manufacture and sale of IFF’s and the N&B Business’s products are subject to various regulatory requirements in each of the countries in which their products are developed, manufactured and sold. In addition, IFF and the N&B Business are subject to product safety and compliance requirements established by governments, non-governmental organizations, including industry or similar oversight bodies, or contractually by their customers, including requirements concerning product safety, quality and efficacy, environmental impacts (including packaging, energy and water use and waste management) and other sustainability or similar issues. Changes to regulations or the implementation of additional regulations, especially in certain highly regulated markets served by the N&B Business such as regulatory modernization of food safety laws and evolving standards and regulations affecting pharmaceutical excipients, microbials, or in reaction to new or next-generation technologies, including advances in protein engineering, gene editing and gene mapping, or novel uses of existing technologies has required and may in the future require the N&B Business to reduce or remove certain ingredients, substances or processing aids from the product portfolio and may result in significant costs or capital expenditures or require changes in business practice that could result in reduced margins or profitability. IFF and the N&B Business use a variety of strategies, methodologies and tools to minimize the likelihood of product or process non-compliance with these regulations and standards by (i) identifying current product standards, (ii) assessing relative risks in the supply chain, (iii) monitoring internal and external performance and (iv) testing raw materials and finished goods. As concerns regarding safety, quality and environmental impact become more pressing, the combined company may see new, more restrictive regulations adopted that impact the combined company’s products. For example, the European Chemicals Agency has proposed that the European Commission adopt a ban on microplastics, including those found in personal care items, detergents and cosmetics, to reduce plastics pollution. If this ban is adopted, the combined company will be required to modify products and/or innovate new solutions to replace microplastics in its products. If the combined company is unable to adapt to these new regulations or standards in a cost effective and timely manner, the combined company may lose business to competitors who are able to provide compliant products.

Gaps in the combined company’s operational processes or those of its suppliers or distributors can result in products that do not meet the combined company’s quality control or industry standards or fail to comply with the relevant regulatory requirements, which in turn can result in finished consumer goods that do not comply with applicable standards and requirements. Products that are mislabeled, contaminated or damaged could result in a regulatory non-compliance event or even a product recall by the FDA or a similar foreign agency. IFF’s and N&B’s contracts often require indemnification of customers for the costs associated with a product non-compliance event, including penalties, costs and settlements arising from litigation, remediation costs or loss of sales. As the combined company’s flavors and fragrance compounds and ingredients and its nutrition and health, food and beverage and pharma offerings are used in many products intended for human use or consumption, these consequences would be exacerbated if the combined company or its customer did not identify the defect before the product reaches the consumer and there was a resulting impact at the consumer level. Such a result could lead to potentially large scale adverse publicity, negative effects on consumer’s health, recalls and potential litigation, fines, penalties, sanctions or other regulatory actions. In addition, if the combined company does not have adequate insurance or contractual indemnification from suppliers or other third parties, or if insurance or indemnification is not available, the liability relating to product or possible third-party claims arising from mislabeled, contaminated or damaged products could adversely affect its business, financial condition or results of operations. Furthermore, adverse publicity about the combined company’s products, or its customers’ products that contain its ingredients, including concerns about product safety or similar issues,

 

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whether real or perceived, could harm its reputation and result in an immediate adverse effect on the combined company’s sales and customer relationships, as well as require the combined company to utilize significant resources to rebuild its reputation.

Increasing awareness of health and wellness are driving changes in the consumer products industry, and if the combined company is unable to react in a timely and cost-effective manner, its results of operations and future growth may be adversely affected.

The combined company must continually anticipate and react, in a timely and cost-effective manner, to changes in consumer preferences and demands, including changes in demand driven by increasing awareness of health and wellness and demands for transparency or cleaner labels with respect to product ingredients by consumers and regulators. Consumers, especially in developed economies such as the U.S. and Western Europe, are rapidly shifting away from products containing artificial ingredients to all-natural, healthier alternatives. In addition, there has been a growing demand by consumers, non-governmental organizations and, to a lesser extent, governmental agencies to provide more transparency in product labeling and our customers have been taking steps to address this demand, including by voluntarily providing product-specific ingredients disclosure. These two trends could affect the types and volumes of the combined company’s ingredients and compounds that its customers include in their consumer product offerings and, therefore, affect the demand for its products. If the combined company is unable to react to or anticipate these trends in a timely and cost-effective manner, our results of operations and future growth may be adversely affected.

IFF and the N&B Business are subject to increasing customer, consumer and regulatory focus on sustainability issues, which may result in additional costs in order to meet new requirements or upgrade Frutarom’s sustainability practices.

Federal, state, local and foreign governments, IFF’s and the N&B Business’s customers and consumers are becoming increasingly sensitive to sustainability issues. IFF and the N&B Business have committed to a sustainability strategy designed to meet this global trend. IFF is currently assessing its combined environmental footprint following the Frutarom acquisition, with the intent of identifying synergies, gaps and opportunities in our sustainability efforts.

As part of IFF’s assessment so far, IFF has begun upgrading Frutarom’s sustainability practices to better align them to its legacy IFF practices, and which may require significant costs and time to implement. IFF’s assessment may reveal additional gaps between the legacy Frutarom operations and its sustainability practices and goals, which may require significant costs to remedy.

Despite IFF’s and the N&B Business’s efforts, the increased focus on sustainability may result in new regulations and customer requirements that could negatively affect the combined company. These could cause the combined company to incur additional direct costs or to make changes to its operations in order to comply with any new regulations and customer requirements. The combined company could also lose revenue if its customers divert business from the combined company because it has not complied with their sustainability requirements or if the combined company is not successful in improving Frutarom’s sustainability metrics. These potential costs, changes and loss of revenue could have a material adverse effect on the combined company’s business, results of operations and financial condition.

IFF and the N&B Business have investments in and continue to expand their business into emerging markets, which exposes the combined company to certain risks.

As part of IFF’s and the N&B Business’s growth strategy, IFF and the N&B Business have increased their presence in emerging markets by expanding their manufacturing presence, sales organization and product offerings in these markets, and IFF and the N&B Business expect to continue to expand their businesses in these markets. With IFF’s acquisition of Frutarom in 2018, which also had a significant presence in emerging markets,

 

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IFF’s business in these markets has meaningfully grown. In addition to the currency and international risks described below, IFF’s and the N&B Business’s operations in these markets may be subject to a variety of other risks. Emerging markets typically have a consumer base with limited or fluctuating disposable income and customer demand in these markets may fluctuate accordingly. As a result, decrease in customer demand in emerging markets may have an adverse effect on the combined company’s ability to execute its growth strategy.

Further, there is no assurance that IFF’s and the N&B Business’s existing products, variants of their existing products or new products that the combined company makes, manufactures, distributes or sells will be accepted or be successful in any particular developing or emerging market, due to local or global competition, product price, cultural differences, consumer preferences or otherwise. In addition, emerging markets may have weak legal systems which may affect the combined company’s ability to enforce its intellectual property and contractual rights, exchange controls, unstable governments and privatization or other government actions that may affect taxes, subsidies and incentive programs and the flow of goods and currency. In conducting IFF’s and the N&B Business’s business, IFF and the N&B Business move products from one country to another and may provide services in one country from a subsidiary located in another country. Accordingly, IFF and the N&B Business are vulnerable to abrupt changes in trade, customs and tax regimes in these markets. If the combined company is unable to expand its business in developing and emerging markets, effectively operate, or manage the risks associated with operating in these markets, or achieve the return on capital it expects from its investments in these markets, the combined company’s operating results and future growth could be adversely affected.

The impact of currency fluctuation or devaluation in the international markets in which the combined company operates may negatively affect the combined company’s results of operations.

IFF and the N&B Business have significant operations outside the U.S., the results of which are reported in the local currency and then translated into U.S. dollars at applicable exchange rates for inclusion in their consolidated financial statements. The exchange rates between these currencies and the U.S. dollar have fluctuated and will continue to do so in the future. For example, as of July 1, 2018, IFF concluded that Argentina’s economy is highly inflationary under GAAP, as it has experienced cumulative inflation of approximately 100% or more over a three-year period. While IFF’s current operations in Argentina represent less than 3% of its consolidated net sales and less than 1% of its consolidated total assets, continuing inflation in Argentina could adversely affect the combined company’s profitability in a specific period. Changes in exchange rates between these local currencies and the U.S. dollar will affect the recorded levels of sales, profitability, assets and/or liabilities. Additionally, volatility in currency exchange rates may adversely impact the combined company’s financial condition, cash flows or liquidity. Although the combined company expects to employ a variety of techniques to mitigate the impact of exchange rate fluctuations, including sourcing strategies and a limited number of foreign currency hedging activities, it cannot guarantee that such hedging and risk management strategies will be effective, and its results of operations could be adversely affected.

International economic, political, legal, compliance and business factors could negatively affect the financial statements, operations and growth of the combined company.

The combined company will operate on a global basis, with manufacturing and sales facilities in the U.S., Europe, Africa, the Middle East, Latin America and Greater Asia, and is expected to continue to expand its international operations. As a result, the business of the combined company will be increasingly exposed to risks inherent in international operations. These risks, which can vary substantially by location, include the following:

 

   

governmental laws, regulations and policies adopted to manage national economic and macroeconomic conditions, such as increases in taxes, austerity measures that may impact consumer spending, monetary policies that may impact inflation rates, employment regulations, currency fluctuations or controls and sustainability of resources;

 

   

changes in environmental, health and safety regulations, such as the continued implementation of the European Union’s REACH regulations and similar regulations that are being evaluated and adopted in

 

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other markets, and the burdens and costs of the combined company’s compliance with such regulations which may differ significantly across jurisdictions;

 

   

increased environmental, health and safety regulations or the loss of necessary environmental permits in certain countries;

 

   

the imposition of or changes in customs, tariffs, quotas, trade barriers, other trade protection measures, import or export licensing requirements, and sanctions on trade with certain countries, imposed by the U.S. or other countries, which could adversely affect the combined company’s cost or ability to import raw materials or export the combined company’s products to surrounding markets;

 

   

risks and costs arising from the combined company’s ability to cater to local demand and customer preferences, language and cultural differences;

 

   

changes in the laws and policies that govern foreign investment in the countries in which the combined company operates, including the risk of expropriation or nationalization, the costs and ability to repatriate the profit that the combined company generates in these countries;

 

   

risks and costs associated with complying with anti-money laundering and counter-terrorism financing laws;

 

   

risks and costs associated with political and economic instability, bribery and corruption, anti-American sentiment, and social and ethnic unrest in the countries in which the combined company operates;

 

   

difficulty in recruiting and retaining trained local personnel;

 

   

natural disasters, global or local health crisis (such as the recent coronavirus outbreak), pandemics, epidemics or international conflicts, including terrorist acts, political crisis, national and regional labor strikes in the countries in which the combined company operates, which could endanger the combined company’s personnel, interrupt its operations or adversely affect the demand for its products, the results of certain regions or the combined company’s global supply chain; or

 

   

the risks of operating in developing or emerging markets in which there are significant uncertainties regarding the interpretation, application and enforceability of laws and regulations and the enforceability of contract rights and intellectual property rights.

The occurrence of any one or more of these factors could increase the combined company’s costs, and adversely affect the results of the combined company’s operations.

Failure to comply with environmental protection laws may cause the combined company to close, relocate or operate one or more of its plants at reduced production levels, and expose the combined company to civil or criminal liability, which could adversely affect the combined company’s operating results and future growth.

The business operations and properties of IFF and the N&B Business procure, make use of, manufacture, sell, and distribute substances that are sometimes considered hazardous and are therefore subject to extensive and increasingly stringent federal, state, local and foreign laws and regulations pertaining to protection of the environment, including air emissions, sewage discharges, the use of hazardous materials, waste disposal practices and clean-up of existing environmental contamination.

Failure to comply with these laws and regulations or any future changes to them may result in significant consequences to the combined company, including the need to close or relocate one or more of its production facilities, administrative, civil and criminal penalties, fines, sanctions, litigation, costly remediation measures, liability for damages and negative publicity. If the combined company is unable to meet production requirements, it can lose customer orders, which can adversely affect the combined company’s future growth or the combined company may be required to make incremental capital investments to ensure supply. For example,

 

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IFF recently completed negotiations with the Chinese government concerning the relocation of a second Fragrance facility in China. Idling of facilities or production modifications has caused or may cause customers to seek alternate suppliers due to concerns regarding supply interruptions and these customers may not return or may order at reduced levels even once issues are remediated. If these non-compliance issues reoccur in China or occur or in any other jurisdiction, IFF may lose business and may be required to incur capital spending above previous expectations, close a plant, or operate a plant at significantly reduced production levels on a permanent basis, and the combined company’s operating results and cash flows from operations may be adversely affected.

The combined company’s performance may be adversely impacted if it is not successful in managing its inventory and/or working capital balances.

IFF and the N&B Business evaluate their inventory balances of materials based on shelf life, expected sourcing levels, known uses and anticipated demand based on forecasted customer order activity and changes in their product/sales mix. Efficient inventory management is a key component of their business success, financial returns and profitability. To be successful, the combined company must maintain sufficient inventory levels and an appropriate product/sales mix to meet its customers’ demands, without allowing those levels to increase to such an extent that the costs associated with storing and holding other inventory adversely impact its financial results. If the combined company’s buying decisions do not accurately predict sourcing levels, customer trends or its expectations about customer needs are inaccurate, the combined company may have to take unanticipated markdowns or impairment charges to dispose of the excess or obsolete inventory, which can adversely impact its financial results. Additionally, excess inventory levels of raw materials with a short shelf life in its manufacturing facilities subjects the combined company to the risk of increased inventory shrinkage. If the combined company is not successful in managing its inventory balances and shrinkage, its results of and cash flows from operations may be negatively affected.

IFF and the N&B Business sell certain accounts receivable on a non-recourse basis to unrelated financial institutions under “factoring” agreements that are sponsored, solely and individually, by certain customers. The cost of participating in these programs was immaterial to IFF’s and the N&B Business’s results in all periods. Should the combined company choose not to participate, or if these programs were no longer available, it could reduce the combined company’s cash flows from operations in the period in which the arrangement ends.

The combined company could be adversely affected by violations of the U.S. Foreign Corrupt Practices Act or similar U.S. or foreign anti-bribery and anti-corruption laws and regulations in the jurisdictions in which it operates.

The global nature of IFF’s and the N&B Business’s business, the significance of their international revenue and their focus on emerging markets create various domestic and local regulatory challenges and subject IFF and the N&B Business to risks associated with their international operations. The U.S. Foreign Corrupt Practices Act, or FCPA, and similar anti-bribery and anti-corruption laws and regulations in other countries generally prohibit companies and their intermediaries from making improper payments to foreign officials for the purpose of obtaining or keeping business or for other commercial advantage. In addition, U.S. public companies are required to maintain records that accurately and fairly represent their transactions and have an adequate system of internal accounting controls. Under the FCPA, U.S. companies may be held liable for the corrupt actions taken by directors, officers, employees, agents, or other strategic or local partners or representatives. As such, if IFF, the N&B Business or their intermediaries fail to comply with the requirements of the FCPA or similar legislation, governmental authorities in the U.S. and elsewhere could seek to impose substantial civil and/or criminal fines and penalties which could have a material adverse effect on the combined company’s business, reputation, operating results and financial condition.

IFF and the N&B Business operate, or the combined company may pursue opportunities, in some jurisdictions, such as China, India, Brazil, Russia and Africa, that pose potentially elevated risks of fraud or corruption or increased risk of internal control issues. In certain jurisdictions, compliance with anti-bribery laws may conflict

 

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with local customs and practices. From time to time, IFF and the N&B Business have conducted and will conduct internal investigations of the relevant facts and circumstances, control testing and compliance reviews, and take remedial actions, when appropriate, to help ensure that IFF and the N&B Business are in compliance with applicable corruption and similar laws and regulations. For example, in August 2019, during the integration of Frutarom, IFF was made aware of allegations that two Frutarom businesses operating principally in Russia and Ukraine made certain improper payments, including to representatives of a number of customers. IFF’s investigation substantiated the allegations that improper payments to representatives of customers were made and that key members of Frutarom’s senior management at the time were aware of such payments. IFF did not uncover any evidence suggesting that such payments had any connection to the U.S. In addition, Frutarom grew through rapid acquisition and, as part of its integration efforts, IFF has implemented its anti-corruption and similar policies throughout a number of those acquired companies, many of which were not previously subject to these U.S. laws.

Detecting, investigating and resolving actual or alleged violations of the FCPA or other anti-bribery and anti-corruption laws and regulations is expensive, could consume significant time and attention of the combined company’s senior management and could subject the combined company to investigations and inquiries by governmental and other regulatory bodies. Any allegations of non-compliance with such laws and regulations could have a disruptive effect on the combined company’s operations in such jurisdiction, including interruptions of business or loss of third-party relationships, which may negatively impact the combined company’s results of operations or financial condition. Any determination that the combined company’s operations or activities are not in compliance with such laws and regulations could expose the combined company to severe criminal or civil penalties or other sanctions, significant fines, termination of necessary licenses and permits, and penalties or other sanctions that may harm the combined company’s business and reputation.

Any impairment of IFF’s tangible or intangible long-lived assets, including goodwill, may adversely impact the combined company’s profitability.

A significant portion of IFF’s assets consists of long-lived assets, including tangible assets such as IFF’s manufacturing facilities, and intangible assets, including goodwill. As a result of numerous recent acquisitions, including the 2018 acquisition of Frutarom, as of December 31, 2019, IFF had recorded approximately $8.3 billion of intangible assets and goodwill, including $4.3 billion of goodwill associated with the acquisition of Frutarom. The combined company’s results of operations and financial position in future periods could be negatively impacted should future impairments of IFF’s long-lived assets, including intangible assets or goodwill occur.

At least annually, IFF assesses both goodwill and indefinite-lived intangible assets for impairment. IFF tests for impairment by comparing the estimated fair value of a reporting unit with its carrying amount. If the carrying amount of a reporting unit exceeds its estimated fair value, IFF records an impairment charge based on the difference of the two. Long-lived assets are also tested for impairment when events or changes in circumstances indicate the carrying value may not be recoverable. Such events and changes in circumstances could include a sustained decrease in IFF’s market capitalization, increased competition or unexpected loss of market share, increased input costs beyond projections (for example due to regulatory or industry changes), IFF’s inability to recognize the anticipated benefits of acquisitions, unexpected business disruptions (for example due to a natural disaster, public health crises, such as pandemics or epidemics or loss of a customer, supplier, or other significant business relationship), acts by governments and courts, operating results falling short of projections, or significant adverse changes in the markets in which IFF operates.

Fair value determinations require considerable judgment and are sensitive to changes in underlying assumptions, estimates and market factors. Estimating the fair value of reporting units requires IFF to make assumptions and estimates regarding its business performance, future plans, future annual net cash flows, income tax considerations, discount rates, growth rates, and based on industry, economic, regulatory conditions and other market factors. To the extent any of IFF’s acquisitions, including the acquisition of Frutarom, do not perform as

 

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anticipated and IFF’s underlying assumptions and estimates related to their fair value determination are not met, whether due to internal or external factors, the value of such assets may be negatively affected and the combined company may be required to record impairment charges.

The combined company’s ability to compete effectively depends on the combined company’s ability to protect IFF’s or the N&B Business’s intellectual property rights.

IFF and the N&B Business rely on patents and trade secrets to protect their respective intellectual property rights. IFF and the N&B Business often rely on trade secrets to protect its proprietary fragrance and flavor formulations, as well as its extract methodologies, and processes for its nutrition, natural colors for food and natural antioxidants for food protection, as this does not require IFF or the N&B Business to publicly file information regarding its intellectual property. From time to time, a third party may claim that IFF or the N&B Business have infringed upon or misappropriated their intellectual property rights, or a third party may infringe upon or misappropriate IFF’s and the N&B Business’s intellectual property rights. The combined company could incur significant costs in connection with legal actions to assert IFF’s and the N&B Business’s intellectual property rights against third parties or to defend the combined company from third-party assertions of invalidity, infringement, misappropriation or other claims. Any settlement or adverse judgment resulting from such litigation could require the combined company to obtain a license to continue to use the intellectual property rights that are the subject of the claim, or otherwise restrict or prohibit the combined company’s use of such intellectual property rights. Any required licenses may not be available to the combined company on acceptable terms, if at all. For those intellectual property rights that are protected as trade secrets, this litigation could result in even higher costs, and potentially the loss of certain rights, since IFF and the N&B Business would not have a perfected intellectual property right that precludes others from making, using or selling their products or processes. The ongoing trend among IFF’s and the N&B Business’s customers towards more transparent labeling could further diminish the combined company’s ability to effectively protect its proprietary flavor formulations.

IFF and the N&B Business vigilantly protect their respective intellectual property rights, including trade secrets. IFF and the N&B Business have designed and implemented internal controls intended to restrict access to and distribution of their respective intellectual property. Despite these precautions, N&B’s intellectual property is vulnerable to unauthorized access through employee error or actions, theft and cybersecurity incidents, and other security breaches. When unauthorized access and use or counterfeit products are discovered, DuPont considers the matter for report to governmental authorities for investigation, as appropriate, and takes measures to mitigate any potential impact. Protecting intellectual property related to biotechnology is particularly challenging because theft is difficult to detect and biotechnology can be self-replicating. Accordingly, the impact of such theft can be significant.

For intellectual property rights that IFF and the N&B Business seek to protect through patents, IFF and the N&B Business cannot be certain that these rights, if obtained, will not later be opposed, invalidated, or circumvented. In addition, even if such rights are obtained in the U.S., the laws of some of the other countries in which IFF’s and the N&B Business’s products are or may be sold do not protect intellectual property rights to the same extent as the laws of the US. If other parties were to infringe on IFF’s or the N&B Business’s intellectual property rights, or if their intellectual property rights were the subject of unauthorized access leading to competitive pressure or if a third party successfully asserted that IFF or the N&B Business had infringed on their intellectual property rights, it could materially and adversely affect the combined company’s future results of operations by, among other things, (i) reducing the price that the combined company could obtain in the marketplace for products which are based on such rights, (ii) increasing the royalty or other fees that the combined company may be required to pay in connection with such rights, (iii) limiting the volume, if any, of such products that the combined company can sell or (iv) resulting in significant litigation costs and potential liability.

 

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The combined company’s results of operations may be negatively impacted by the outcome of uncertainties related to litigation.

From time to time IFF and the N&B Business are involved in a number of legal claims, regulatory investigations and litigation, including claims related to intellectual property, product liability, environmental matters and indirect taxes. For instance, product liability claims may arise due to the fact that IFF supplies flavors and fragrances to the food and beverage, functional food, pharma/nutraceutical and personal care industries. IFF’s and the N&B Business’s manufacturing and other facilities may expose them to environmental claims and regulatory investigations. In addition, as IFF expands its product offering into functional food, nutraceuticals, and natural antioxidants, IFF may also be subject to claims of false or deceptive advertising claims in the U.S., Europe and other foreign jurisdictions in which IFF offers these types of products. These claims can arise as a result of function claims, health claims, nutrient content claims and other claims that impermissibly suggest therapeutic benefits for certain foods or food components. The cost of defending these claims or IFF’s obligations for direct damages and indemnification if IFF were found liable could adversely affect the combined company’s results of operations.

As a result of the acquisition of Frutarom, IFF assumed a number of legal claims, regulatory investigations and litigation and IFF may become involved in additional actions in the future arising from the acquired operations. Specifically, as Frutarom has a significantly greater number of facilities that are located globally and a significantly larger number of customers, IFF’s exposure to these types of environmental claims, product liability claims and regulatory investigations may increase. This could result in an increase in the combined company’s cost for defense or settlement of claims or indemnification obligations if the combined company were to be found liable in excess of IFF’s historical experience.

In addition, IFF is also the subject of a putative shareholder class action lawsuit filed in August 2019 after IFF disclosed that preliminary results of investigations indicated that Frutarom businesses operating principally in Russia and Ukraine had made improper payments to representatives of customers.

The combined company’s insurance may not be adequate to protect it from all material expenses related to pending and future claims and IFF’s and the N&B Business’s current levels of insurance may not be available in the future at commercially reasonable prices. Any of these factors could adversely affect the combined company’s profitability and results of operations.

IFF’s and the N&B Business’s funding obligations for their respective pension and postretirement plans could adversely affect the combined company’s earnings and cash flows.

The funding obligations for IFF’s and the N&B Business’s pension plans are impacted by the performance of the financial markets, particularly the equity markets and interest rates. Funding obligations are determined under government regulations and are measured each year based on the value of assets and liabilities on a specific date. If the financial markets do not provide the long-term returns that are expected under the governmental funding calculations, IFF and the N&B Business could be required to make larger contributions. The equity markets can be very volatile, and therefore IFF’s and the N&B Business’s estimate of future contribution requirements can change dramatically in relatively short periods of time. Similarly, changes in interest rates and legislation enacted by governmental authorities can impact the timing and amounts of contribution requirements. An adverse change in the funded status of the plans could significantly increase IFF’s and the N&B Business’s required contributions in the future and adversely impact the combined company’s liquidity.

Assumptions used in determining projected benefit obligations and the fair value of plan assets for pension and other postretirement benefit plans are determined by IFF and the N&B Business in consultation with outside consultants and advisors. If it is determined that changes are warranted in the assumptions used, such as the discount rate, expected long-term rate of return on assets, or expected health care costs, the combined company’s future pension and postretirement benefit expenses could increase or decrease. Due to changing market

 

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conditions or changes in the participant population, the assumptions that were used may differ from actual results, which could have a significant impact on the combined company’s pension and postretirement liabilities and related costs and funding requirements.

Changes in the tax rates, the adoption of new U.S. or international tax legislation, or changes in existing tax laws could expose the combined company to additional tax liabilities that may affect the combined company’s future results.

IFF and the N&B Business are subject to taxes in the U.S. and numerous foreign jurisdictions. The combined company’s future effective tax rates could be affected by changes in the mix of earnings in countries with differing statutory tax rates, changes in the valuation of deferred tax assets and liabilities, changes in liabilities for uncertain tax positions, cost of repatriations or changes in tax laws or their interpretation. Any of these changes could have a material adverse effect on the combined company’s profitability.

IFF and the N&B Business have and will continue to implement transfer pricing policies among their various operations located in different countries. These transfer pricing policies are a significant component of the management and compliance of operations across international boundaries and overall financial results. Many countries routinely examine transfer pricing policies of taxpayers subject to their jurisdiction, challenge transfer pricing policies aggressively where there is potential non-compliance and impose significant interest charges and penalties where non-compliance is determined. However, governmental authorities could challenge these policies more aggressively in the future and, if challenged, the combined company may not prevail. The combined company could suffer significant costs related to one or more challenges to the combined company’s transfer pricing policies.

IFF and the N&B Business are subject to the continual examination of their income tax returns by the Internal Revenue Service, state tax authorities and foreign tax authorities in those countries in which IFF and the N&B Business operate, and the combined company may be subject to assessments or audits in the future in any of the countries in which it operates. The final determination of tax audits and any related litigation could be materially different from IFF’s or the N&B Business’s historical income tax provisions and accruals, and while the results that follow are not expected to have a material adverse effect on their financial condition, such results could have a material effect on the combined company’s income tax provision, net income or cash flows in the period or periods in which that determination is made.

In addition, a number of international legislative and regulatory bodies have proposed legislation and begun investigations of the tax practices of multi-national companies and, in the European Union, the tax policies of certain European Union member states. One of these efforts has been led by the Organisation for Economic Co-operation and Development, an international association of 34 countries including the U.S., which has finalized recommendations to revise corporate tax, transfer pricing, and tax treaty provisions in member countries. Since 2013, the European Commission (“EC”) has been investigating tax rulings granted by tax authorities in a number of European Union member states with respect to specific multi-national corporations to determine whether such rulings comply with European Union rules on state aid, as well as more recent investigations of the tax regimes of certain European Union member states. Under European Union law, selective tax advantages for particular taxpayers that are not sufficiently grounded in economic realities may constitute impermissible state aid. If the EC determines that a tax ruling or tax regime violates the state aid restrictions, the tax authorities of the affected European Union member state may be required to collect back taxes for the period of time covered by the ruling. In late 2015 and early 2016, the EC declared that tax rulings, related to other companies, by tax authorities in Luxembourg, the Netherlands and Belgium did not comply with the European Union state aid restrictions. If the EC or tax authorities in other jurisdictions were to successfully challenge tax rulings applicable to the combined company in any of the member states in which it is subject to taxation or the combined company’s internal intercompany arrangements, the combined company could be exposed to increased tax liabilities.

In December 2017, the U.S. government enacted comprehensive tax legislation commonly referred to as the Tax Cuts and Jobs Act (the “Tax Act”) that significantly revised the U.S. tax code effective January 1, 2018 by,

 

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among other things, lowering the corporate income tax rate from a top marginal rate of 35% to a flat 21%, limiting deductibility of interest expense and performance based incentive compensation, transitioning to a territorial system and creating new taxes associated with global operations. The Tax Act impacted IFF’s consolidated results of operations during 2018 and 2019 and is expected to continue to impact the combined company’s consolidated results of operations in future periods. In future periods, the combined company expects that its effective tax rate will be impacted by the lower U.S. corporate tax rate that will initially be offset by the elimination of the deductibility of performance-based incentive compensation, and other provisions of the Tax Act that may impact the combined company prospectively. However, the ultimate impact of the Tax Act will depend on additional regulatory or accounting guidance that may be issued with respect to the Tax Act and any operating and structural changes that the combined company may undertake to permit it to benefit from the new, lower U.S. tax rate prospectively. This could adversely affect the combined company’s results of operations.

The combined company’s business may be negatively impacted as a result of the United Kingdom’s departure from the European Union.

IFF and the N&B Business currently manufacture goods in the United Kingdom for distribution in the European Union and vice-versa and therefore may be adversely affected as a result of the United Kingdom’s departure from the European Union (“Brexit”) in 2020. The impact of the withdrawal could, among other outcomes, exacerbate the disruption of the free movement of goods, services and people between the United Kingdom and the European Union, undermine bilateral cooperation in key geographic areas and significantly disrupt trade between the United Kingdom and the European Union or other nations as the United Kingdom pursues independent trade relations. In addition, Brexit has caused legal uncertainty, which could last indefinitely, and may potentially create divergent national laws and regulations as the United Kingdom determines which European Union laws to replace or replicate. Given the lack of comparable precedent, it is unclear what the financial, trade and legal implications of the withdrawal of the United Kingdom from the European Union will be and how the withdrawal will affect the combined company. Adverse consequences concerning Brexit or the European Union could include deterioration in global economic conditions, instability in global financial markets, political uncertainty, volatility in currency exchange rates, or adverse changes in the cross-border agreements currently in place, any of which could have an adverse impact on the combined company’s financial results in the future.

The expected phase out of the London Interbank Office Rate (“LIBOR”) could impact the interest rates paid on the combined company’s variable rate indebtedness and cause the combined company’s interest expense to increase.

In 2017, the United Kingdom’s Financial Conduct Authority, which regulates LIBOR, announced that it intends to phase out LIBOR by the end of 2021. Currently there is no definitive information regarding the future utilization of LIBOR or of any particular replacement rate. Borrowings under IFF’s revolving credit facility and term loan are at variable interest rates based on LIBOR. If LIBOR is no longer available, or if the combined company’s lenders have increased costs due to changes in LIBOR, the combined company may need to amend its debt facilities to replace LIBOR with an agreed upon replacement index, which could result in higher rates and adversely impact the combined company’s interest expense.

 

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CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS

This prospectus (including information included or incorporated by reference herein) and other materials IFF, DuPont and N&B have filed or will file with the SEC contain, or will contain, forward-looking statements. Forward-looking statements often address expected future business and financial performance and financial condition, and often contain words such as “expect,” “anticipate,” “intend,” “plan,” “believe,” “seek,” “see,” “will,” “would,” “target,” similar expressions, and variations or negatives of these words. Forward-looking statements by their nature address matters that are, to different degrees, uncertain, such as statements about the Transactions, the expected timetable for completing the Transactions, the benefits and synergies of the Transactions, future opportunities for the combined company and its products and any other statements regarding DuPont’s, IFF’s and N&B’s future operations, financial or operating results, capital allocation, dividend policy, debt ratio, anticipated business levels, future earnings, planned activities, anticipated growth, market opportunities, strategies, competitions, and other expectations and targets for future periods. These and other forward-looking statements are not guarantees of future results and are subject to risks, uncertainties and assumptions that could cause actual results to differ materially from those expressed in any forward-looking statements. There are several factors which could cause actual plans and results to differ materially from those expressed or implied in forward-looking statements. Such factors include, but are not limited to:

 

   

the ability of DuPont, N&B and IFF to receive regulatory approvals required to complete the Transactions, or such required approvals delaying the Transactions or resulting in the imposition of conditions that could have a material adverse effect on the combined company or causing the companies to abandon the Transactions;

 

   

the impact of any divestitures that may be required as a condition to consummation of the Transactions as well as other conditional commitments;

 

   

risks associated with third party contracts containing consent and/or other provisions that may be triggered by the Transactions;

 

   

other conditions to the closing of the Transactions not being satisfied;

 

   

a material adverse change, event or occurrence affecting IFF or the N&B Business prior to the closing of the Transactions delaying the Transactions or causing the companies to abandon the Transactions;

 

   

the integration of the N&B Business and IFF being more difficult, time consuming or costly than expected, which may result in the combined company not operating as effectively and efficiently as expected;

 

   

inherent uncertainties involved in the estimates and judgments used in the preparation of financial statements and the providing of estimates of financial measures, in accordance with GAAP and related standards, or on an adjusted basis;

 

   

IFF’s ability to achieve the expected benefits, synergies and operating efficiencies expected to result from the Transactions in the estimated amounts and within the anticipated time frame, if at all;

 

   

the possibility that the Transactions may involve other unexpected costs, liabilities or delays;

 

   

the parties’ ability to meet expectations regarding the timing, completion and accounting and tax treatment of the Transactions;

 

   

risks and costs and pursuit and/or implementation of the Separation, including timing anticipated to complete the Separation, any changes to the configuration of businesses included in the Separation if implemented;

 

   

the possibility that the failure to complete the Transactions could adversely affect the market price of DuPont or IFF common stock as well as each of DuPont’s, N&B’s and IFF’s business, financial condition and results of operations;

 

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the possibility that if completed, the Transactions may not be successful or achieve their anticipated benefits;

 

   

the businesses and market price of the common stock of each respective company being negatively impacted as a result of uncertainty surrounding the Transactions;

 

   

disruptions from the Transactions harming relationships with customers, employees or suppliers;

 

   

risks related to the value of IFF’s shares to be issued in the Transactions and uncertainty as to the long-term value of IFF common stock and DuPont common stock;

 

   

risks associated with potential litigation related to the Transactions that could be instituted against DuPont, IFF or their respective directors;

 

   

the effect of economic conditions in the industries and markets in which IFF and the N&B Business operate in the U.S. and globally and any changes therein, including financial market conditions, fluctuations in commodity prices, interest rates and foreign currency exchange rates, levels of end market demand, the impact of weather conditions, natural disasters, public health issues, epidemics and pandemics, including COVID-19, or the fear of such events, and the financial condition of IFF’s and N&B’s customers and suppliers;

 

   

the potential inability or reduced access to the capital markets or increased cost of borrowings, including as a result of a credit rating downgrade;

 

   

the risk that N&B, as a newly formed entity that currently has no credit rating, will not have access to the capital markets on acceptable terms;

 

   

uncertainties regarding future prices, industry capacity levels and demand for each company’s products, raw materials and energy costs and availability, changes in governmental regulations or the adoption of new laws or regulations that may make it more difficult or expensive to operate each company’s businesses or manufacture its products before or after the Transactions, each company’s ability to achieve expected or targeted future financial and operating performance and results before and after the Transactions, future economic conditions in the specific industries to which its respective products are sold and global economic conditions;

 

   

future levels of indebtedness, including significant indebtedness expected to be incurred in connection with the Transactions, future compliance with debt covenants and the degree to which IFF will be leveraged following completion of the Transactions each of which may materially and adversely affect the combined company’s business, financial condition and results of operations;

 

   

IFF and N&B may be unable to timely obtain or consummate the financing or refinancing required in connection with the Transactions upon acceptable terms or at all;

 

   

the effect of changes in political conditions in the U.S. and other countries in which IFF and N&B operate, including the effect of changes in U.S. trade policies or the U.K.’s withdrawal from the EU, on general market conditions, global trade policies and currency exchange rates in the near term and beyond;

 

   

the risk that natural disasters, public health issues, epidemics and pandemics, including COVID-19, or the fear of such events, could provoke responses that cause delays in the anticipated transaction timing or the completion of Transactions, including, without limitation, as a result of any government or company imposed travel restrictions or the closure of government offices and resulting delays with respect to any matters pending before such governmental authorities;

 

   

the effect of changes in tax, environmental, regulatory (including among other things import/export) and other relevant laws and regulations in the U.S. and other countries in which IFF and N&B operate; and

 

   

other risk factors discussed herein and listed from time to time in DuPont’s and IFF’s public filings with the SEC.

 

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Unlisted factors, risks and uncertainties may present significant additional obstacles to the realization of forward-looking statements. For a further discussion of the factors described above and other risks and uncertainties, see the section of this document entitled “Risk Factors” as well as the sections entitled “Information on IFF” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations for the N&B Business.” However, no list or description should be considered to be a complete statement of all potential factors, risks and uncertainties. These may be other factors, risks and uncertainties that the parties are unable to currently identify or that the parties do not currently expect to have a material impact on IFF or the N&B Business, as applicable. As such, there can be no assurance that the Transactions will in fact be completed in the manner described or at all.

In addition, material differences in results as compared with those anticipated in forward-looking statements, as well as unknown or unpredictable factors, could have consequences which could include, among other things, business disruption, operational problems, financial loss, legal liability to third parties and similar risks, any of which, could have a material adverse effect on the consolidated financial condition, results of operations, credit rating or liquidity of IFF, DuPont, the N&B Business or, following the Merger, the combined company.

The information contained herein speaks as of the date hereof and none of IFF, DuPont nor N&B assumes any obligation to publicly provide revisions or updates to any forward-looking statements, whether as a result of new information, future developments or otherwise, should circumstances change, except as otherwise required by securities and other applicable laws.

 

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THE EXCHANGE OFFER

Terms of the Exchange Offer

General

DuPont is offering to exchange all shares of N&B common stock that are owned by DuPont for shares of DuPont common stock, at an exchange ratio to be calculated in the manner described below, on the terms and subject to the conditions and limitations described below and in the letter of transmittal and the exchange and transmittal information booklet, each filed as an exhibit to the registration statement of which this prospectus forms a part, that are validly tendered and not properly withdrawn prior to one minute after 11:59 p.m., New York City time, on January 29, 2021, unless the Exchange Offer is extended or terminated. The last day on which tenders will be accepted, whether on January 29, 2021 or any later date to which the Exchange Offer is extended, is referred to in this document as the “expiration date.” You may tender all, some or none of your shares of DuPont common stock.

DuPont currently expects approximately 142 million shares of N&B common stock will be held by DuPont upon completion of the Separation. The number of shares of DuPont common stock that will be accepted if the Exchange Offer is completed will depend on the final exchange ratio, the number of shares of N&B common stock offered (i.e., approximately 142 million) and the number of shares of DuPont common stock tendered.

DuPont’s obligation to complete the Exchange Offer is subject to important conditions that are described in the section entitled “—Conditions to Consummation of the Exchange Offer.”

For each share of DuPont common stock that you validly tender in the Exchange Offer and do not properly withdraw and that is accepted, you will receive a number of shares of N&B common stock at a 7% discount to the per-share value of IFF common stock, calculated as set forth below, subject to an upper limit of 0.7180 shares of N&B common stock per share of DuPont common stock. Stated another way, subject to the upper limit described below, for each $100 of DuPont common stock accepted in the Exchange Offer, you will receive approximately $107.53 of N&B common stock.

The final calculated per-share value and per-share value, as applicable, will be equal to:

 

   

with respect to DuPont common stock, the simple arithmetic average of the daily VWAP of DuPont common stock on the NYSE for each of the Valuation Dates, as reported by Bloomberg L.P. displayed under the heading Bloomberg VWAP on the Bloomberg page “DD UN<Equity>AQR” (or its equivalent successor page if such page is not available); and

 

   

with respect to N&B common stock, the simple arithmetic average of the daily VWAP of IFF common stock on the NYSE for each of the Valuation Dates, as reported by Bloomberg L.P. displayed under the heading Bloomberg VWAP on the Bloomberg page “IFF UN<Equity>AQR” (or its equivalent successor page if such page is not available).

The daily VWAP provided by Bloomberg L.P. may be different from other sources of volume-weighted average prices or investors’ or security holders’ own calculations of volume-weighted average prices. DuPont will determine such calculations of the per-share value of DuPont common stock and the per-share value of N&B common stock, and such determination will be final.

If the upper limit on the number of shares of N&B common stock that can be received for each share of DuPont common stock tendered is in effect, then the exchange ratio will be fixed at the limit.

Upper Limit

The number of shares of N&B common stock you can receive in the Exchange Offer is subject to an upper limit of 0.7180 shares of N&B common stock for each share of DuPont common stock accepted in the Exchange

 

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Offer. If the upper limit is in effect, a stockholder will receive less than $107.53 of N&B common stock for each $100 of DuPont common stock that the stockholder validly tenders, that is not properly withdrawn and that is accepted in the Exchange Offer, and the stockholder could receive much less. This limit was calculated based on a 12% discount for shares of N&B common stock based on the closing price of DuPont common stock on the NYSE and IFF common stock on the NYSE on the trading day immediately preceding the commencement of the Exchange Offer. DuPont set this limit to ensure that an unusual or unexpected drop in the trading price of IFF common stock, relative to the trading price of DuPont common stock, would not result in an unduly high number of shares of N&B common stock being exchanged for each share of DuPont common stock accepted in the Exchange Offer. DuPont will announce whether the upper limit on the number of shares that can be received for each share of DuPont common stock tendered will be in effect, through www.dupontexchangeoffer.com and by press release, no later than 11:59 p.m., New York City time, at the end of the second trading day immediately preceding the expiration date.

Pricing Mechanism

The terms of the Exchange Offer are designed to result in your receiving $107.53 of N&B common stock for each $100 of DuPont common stock validly tendered, not properly withdrawn and accepted in the Exchange Offer based on the calculated per-share values described above. The Exchange Offer does not provide for a minimum exchange ratio because a minimum exchange ratio could result in the shares of N&B common stock exchanged for each $100 of DuPont common stock being valued higher than approximately $107.53. Regardless of the final exchange ratio, the terms of the Exchange Offer would always result in you receiving approximately $107.53 of N&B common stock for each $100 of DuPont common stock, so long as the upper limit is not in effect. See the table on page 108 for purposes of illustration.

Subject to the upper limit described above, for each $100 of DuPont common stock accepted in the Exchange Offer, you will receive approximately $107.53 of N&B common stock. The following formula will be used to calculate the number of shares of N&B common stock you will receive for shares of DuPont common stock accepted in the Exchange Offer:

 

Number of shares of N&B common stock    =    Number of shares of DuPont common stock tendered and accepted, multiplied by the lesser of:    (a) 0.7180 (the upper limit) and    (b) 100% of the calculated per-share value of DuPont common stock divided by 93% of the calculated per-share value of N&B common stock (calculated as described below)

The calculated per-share value of a share of DuPont common stock for purposes of the Exchange Offer will equal the simple arithmetic average of the daily VWAP of DuPont common stock on the NYSE on each of the Valuation Dates. The calculated per-share value of a share of N&B common stock for purposes of the Exchange Offer will equal the simple arithmetic average of the daily VWAP of IFF common stock on the NYSE on each of the Valuation Dates.

To help illustrate the way this calculation works, below are two examples:

Example 1: Assuming that the average of the daily VWAP on the Valuation Dates is $62.5093 per share of DuPont common stock and $121.4832 per share of IFF common stock, you would receive 0.5533 shares of N&B common stock ($62.5093 divided by 93% of $121.4832) for each share of DuPont common stock accepted in the Exchange Offer. In this example, the upper limit of 0.7180 shares of N&B common stock for each share of DuPont common stock would not apply.

 

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Example 2: Assuming that the average of the daily VWAP on the Valuation Dates is $69.4548 per share of DuPont common stock and $99.3954 per share of IFF common stock, the upper limit would apply and you would only receive 0.7180 shares of N&B common stock for each share of DuPont common stock accepted in the Exchange Offer because the limit is less than 0.7514 shares of N&B common stock ($69.4548 divided by 93% of $99.3954) for each share of DuPont common stock.

Indicative Per-Share Values

Indicative exchange ratios, calculated per-share values of DuPont common stock and calculated per-share values of N&B common stock will be made available on each trading day during the Exchange Offer prior to the third Valuation Date, commencing after the close of trading on the third trading day during the Exchange Offer, and may be obtained by contacting the information agent at the toll-free number provided on the back cover of this prospectus or at the website will be maintained at www.dupontexchangeoffer.com.

From after the close of trading on the third trading day of the Exchange Offer until the first Valuation Date, the website will show the indicative calculated per-share values, as applicable, calculated as though that day were the third Valuation Date of the Exchange Offer, of (i) DuPont common stock, which will equal the simple arithmetic average of the daily VWAP of DuPont common stock, as calculated by DuPont, on each of the three consecutive trading days ending on and including such day and (ii) N&B common stock, which will equal the simple arithmetic average of the daily VWAP of IFF common stock, as calculated by DuPont, on each of the three consecutive trading days ending on and including such day.

On the first two Valuation Dates, when the values of DuPont common stock and N&B common stock are calculated for the purposes of the Exchange Offer, the indicative calculated per-share values of DuPont common stock and the indicative calculated per-share values of N&B common stock, as calculated by DuPont, will each equal (i) after the close of trading on the NYSE on the first Valuation Date, the VWAPs for that day, and (ii) after the close of trading on the NYSE on the second Valuation Date, the VWAPs for that day averaged with the VWAPs on the first Valuation Date. No indicative exchange ratio will be published or announced on the third Valuation Date. The final exchange ratio will be announced by press release and be available on the website, in each case by 11:59 p.m., New York City time, at the end of the second trading day (currently expected to be January 27, 2021) immediately preceding the expiration date of the Exchange Offer (currently expected to be January 29, 2021). DuPont will determine the simple arithmetic average of the VWAPs based on data provided by Bloomberg L.P., and such determinations will be final.

Final Exchange Ratio

The final exchange ratio that shows the number of shares of N&B common stock that you will receive for each share of DuPont common stock accepted in the Exchange Offer will be available at www.dupontexchangeoffer.com and announced by press release by 11:59 p.m., New York City time, at the end of the second trading day (currently expected to be January 27, 2021) immediately preceding the expiration date of the Exchange Offer (currently expected to be January 29, 2021), unless the Exchange Offer is extended or terminated.

After that time, you may also contact the information agent to obtain the final exchange ratio at its toll-free number provided on the back cover of this prospectus.

Each of the daily VWAPs, calculated per-share values and the final exchange ratio will be rounded to four decimal places.

If DuPont common stock or IFF common stock does not trade on any of the Valuation Dates, the calculated per-share value of DuPont common stock and the calculated per-share value of N&B common stock will be determined using the daily VWAP of DuPont common stock and IFF common stock on the preceding full trading day or days, as the case may be, on which both DuPont common stock and IFF common stock did trade.

 

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Since the Exchange Offer is scheduled to expire at one minute after 11:59 p.m., New York City time, on the last day of the Exchange Offer period, and the final exchange ratio will be announced by 11:59 p.m., New York City time, at the end of the second trading day (currently expected to be January 27, 2021) immediately preceding the expiration date of the Exchange Offer (currently expected to be January 29, 2021), unless the Exchange Offer is extended or terminated, you will be able to tender or withdraw your shares of DuPont common stock after the final exchange ratio is determined. The timing of such announcement will therefore provide each holder of DuPont common stock with two full business days after knowing the final exchange ratio and whether the upper limit is in effect during which to decide whether to tender or withdraw their shares in the Exchange Offer. For more information on validly tendering and properly withdrawing your shares, see “—Procedures for Tendering” and “—Withdrawal Rights.”

For the purposes of illustration, the table below indicates the number of shares of N&B common stock that you would receive per share of DuPont common stock, calculated on the basis described above and taking into account the limit described above, assuming a range of averages of the daily VWAP of DuPont common stock and IFF common stock on the Valuation Dates. The first row of the table below shows the indicative calculated per-share value of DuPont common stock, the indicative calculated per-share value of N&B common stock and the indicative exchange ratio that would have been in effect following the official close of trading on the NYSE on December 30, 2020, based on the daily VWAPs of DuPont common stock and IFF common stock on December 28, 2020, December 29, 2020 and December 30, 2020. The table also shows the effects of a 10% increase or decrease in either or both the calculated per-share value of DuPont common stock and the calculated per-share value of N&B common stock based on changes relative to the values of December 30, 2020.

 

DuPont Common Stock    IFF Common Stock   Calculated
Per-Share
Value of
DuPont
Common
Stock(A)
  Calculated Per-
Share Value of
N&B Common
Stock (Before
The 7%
Discount)(B)
  Shares of N&B
Common Stock To
Be Received Per
Share of DuPont
Common Stock
Tendered (The
Exchange Ratio)(C)
  Calculated
Value
Ratio(D)

As of December 30, 2020

   As of December 30, 2020   $69.4548   $110.4393   0.6762x   1.075

Down 10%

   Up 10%   $62.5093   $121.4832   0.5533x   1.075

Down 10%

   Unchanged   $62.5093
  $110.4393   0.6086x   1.075

Down 10%

   Down 10%   $62.5093
  $  99.3954   0.6762x   1.075

Unchanged

   Up 10%   $69.4548   $121.4832   0.6148x   1.075

Unchanged

   Down 10%   $69.4548
  $  99.3954   0.7180x1   1.028

Up 10%

   Up 10%   $76.4003   $121.4832   0.6762x   1.075

Up 10%

   Unchanged   $76.4003
  $110.4393   0.7180x2
  1.038

Up 10%

   Down 10%   $76.4003
  $  99.3954   0.7180x3
  0.934

 

(A)

As of December 30, 2020, the calculated per-share value of DuPont common stock equals the simple arithmetic average of daily VWAPs on each of the three prior trading dates ($68.9922, $69.2459 and $70.1262).

(B)

As of December 30, 2020, the calculated per-share value of N&B common stock equals the simple arithmetic average of daily IFF VWAPs on each of the three prior trading dates ($109.3958, $110.7559 and $111.1663).

(C)

Calculated as A / (B*(1-7%)) or equal to the upper limit, whichever is less.

(D)

The Calculated Value Ratio equals (i) the calculated per-share value of N&B common stock (B) multiplied by the exchange ratio (C), divided by (ii) the calculated per-share value of DuPont common stock (A), rounded to the nearest three decimals.

1.

In this scenario, the upper limit of 0.7180 is in effect. Absent the upper limit, the exchange ratio would have been 0.7514 shares of N&B common stock per share of DuPont common stock validly tendered. DuPont would announce that the upper limit on the number of shares that can be received for each share of DuPont common stock tendered is in effect when DuPont announces the final exchange ratio no later than 11:59 p.m., New York City time, at the end of the second trading day prior to the expiration date of the Exchange Offer.

 

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2.

In this scenario, the upper limit of 0.7180 is in effect. Absent the upper limit, the exchange ratio would have been 0.7439 shares of N&B common stock per share of DuPont common stock validly tendered. DuPont would announce that the upper limit on the number of shares that can be received for each share of DuPont common stock tendered is in effect when DuPont announces the final exchange ratio no later than 11:59 p.m., New York City time, at the end of the second trading day prior to the expiration date of the Exchange Offer.

3.

In this scenario, the upper limit of 0.7180 is in effect. Absent the upper limit, the exchange ratio would have been 0.8265 shares of N&B common stock per share of DuPont common stock validly tendered. DuPont would announce that the upper limit on the number of shares that can be received for each share of DuPont common stock tendered is in effect when DuPont announces the final exchange ratio no later than 11:59 p.m., New York City time, at the end of the second trading day prior to the expiration date of the Exchange Offer.

If the trading price of DuPont common stock were to increase during the last two full trading days prior to the expiration of the Exchange Offer, the average per-share value of DuPont common stock used to calculate the exchange ratio would likely be lower than the closing price of DuPont common stock on the expiration date of the Exchange Offer. As a result, you will receive fewer shares of N&B common stock and, therefore, effectively fewer shares of IFF common stock, for each $100 of DuPont common stock than you would have if that per-share value were calculated on the basis of the closing price of DuPont common stock on the expiration date of the Exchange Offer. Similarly, if the trading price of IFF common stock were to decrease during the last two full trading days prior to the expiration of the Exchange Offer, the average per-share value of N&B common stock used to calculate the exchange ratio would likely be higher than the closing price of IFF common stock on the expiration date of the Exchange Offer. This could also result in your receiving fewer shares of N&B common stock and, therefore, effectively fewer shares of IFF common stock, for each $100 of DuPont common stock than you would otherwise receive if that per-share value were calculated on the basis of the closing price of IFF common stock on the expiration date of the Exchange Offer.

The number of shares of DuPont common stock that may be accepted in the Exchange Offer may be subject to proration. Depending on the number of shares of DuPont common stock validly tendered, and not properly withdrawn in the Exchange Offer, and the final exchange ratio, determined as described above, DuPont may have to limit the number of shares of DuPont common stock that it accepts in the Exchange Offer through a proration process. Any proration of the number of shares accepted in the Exchange Offer will be determined on the basis of the proration mechanics described below under “—Proration; Tenders for Exchange by Holders of Fewer than 100 Shares of DuPont Common Stock.”

This prospectus and related documents are being sent to persons who directly held shares of DuPont’s common stock on December 28, 2020 and brokers, banks and similar persons whose names or the names of whose nominees appear on DuPont’s stockholder list or, if applicable, who are listed as participants in a clearing agency’s security position listing for subsequent transmittal to beneficial owners of DuPont’s common stock.

Proration; Tenders for Exchange by Holders of Fewer than 100 Shares of DuPont Common Stock

If, upon the expiration of the Exchange Offer, DuPont stockholders have validly tendered and not properly withdrawn more shares of DuPont common stock than DuPont is able to accept for exchange (taking into account the exchange ratio and the total number of shares of N&B common stock being offered in the Exchange Offer by DuPont), DuPont will accept for exchange the DuPont common stock validly tendered and not properly withdrawn by each tendering stockholder on a pro rata basis, based on the proportion that the total number of shares of DuPont common stock to be accepted bears to the total number of shares of DuPont common stock validly tendered and not properly withdrawn (rounded to the nearest whole number of shares of DuPont common stock), and subject to any adjustment necessary to ensure the exchange of all shares of N&B common stock being offered by DuPont in the Exchange Offer, except for tenders of odd-lots, as described below.

Except as otherwise provided in this section, beneficial holders (other than participants in the DuPont RSP) of fewer than 100 shares of DuPont common stock who validly tender all of their shares will not be subject to proration if the Exchange Offer is oversubscribed. Beneficial holders of 100 or more shares of DuPont common stock are not eligible for this preference.

 

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Any beneficial holder (other than participants in the DuPont RSP) of fewer than 100 shares of DuPont common stock who wishes to tender all of the shares must complete the section entitled “Odd-Lot Shares” on the letter of transmittal. If your odd-lot shares are held by a broker for your account, you can contact your broker and request the preferential treatment.

DuPont will announce the preliminary proration factor (if any) for the Exchange Offer at www.dupontexchangeoffer.com and separately by press release promptly after the expiration of the Exchange Offer. Upon determining the number of shares of DuPont common stock validly tendered for exchange, DuPont will announce the final results, including the final proration factor for the Exchange Offer.

Any shares of DuPont common stock not accepted for exchange in the Exchange Offer as a result of proration or otherwise will be returned to the tendering stockholder promptly after the final proration factor for the Exchange Offer is determined.

For purposes of the Exchange Offer, a “business day” means any day other than a Saturday, Sunday or U.S. federal holiday and consists of the time period from 12:01 a.m. through 12:00 midnight, New York City time.

Fractional Shares

Following the consummation of the Exchange Offer, Merger Sub I will be merged with and into N&B, whereby N&B will continue as the surviving company and a wholly owned subsidiary of IFF. Each outstanding share of N&B common stock (except for shares of N&B common stock held by N&B as treasury stock or by DuPont, which will be canceled and cease to exist and no consideration will be delivered in exchange therefor) will be automatically converted into the right to receive a number of fully paid and nonassessable shares of IFF common stock such that immediately after the Merger such DuPont stockholders will collectively own approximately 55.4% of IFF common stock on a fully diluted basis, and IFF shareholders will collectively own approximately 44.6% of IFF common stock on a fully diluted basis, in each case excluding any overlaps in the pre-transaction stockholder bases (calculated as further described in “The Merger Agreement—Merger Consideration”). In this conversion of shares of N&B common stock into shares of IFF common stock, no fractional shares of IFF common stock will be delivered to holders of shares of N&B common stock. Instead, all fractional shares of IFF common stock that a holder of shares of N&B common stock would otherwise be entitled to receive as a result of the Merger will be aggregated by the Exchange Agent. The Exchange Agent will cause the whole shares obtained thereby to be sold on behalf of such holders of shares of N&B common stock that would otherwise be entitled to receive such fractional shares of IFF common stock in the Merger in the open market or otherwise, in each case at then prevailing market prices, and in no case later than five business days after the Merger. The Exchange Agent will make available the net proceeds thereof, after deducting any required withholding taxes and brokerage charges, commissions and conveyance and similar taxes, on a pro rata basis, without interest, as soon as practicable to the holders of N&B common stock that would otherwise be entitled to receive such fractional shares of IFF common stock in the Merger.

While proration is possible, DuPont does not expect proration to occur because DuPont currently expects that the number of shares of DuPont common stock tendered in the Exchange Offer will result in fewer than all of the shares of N&B common stock being exchanged, and that shares of N&B common stock will remain to be distributed following the completion of the Exchange Offer.

Exchange of Shares of DuPont Common Stock

Upon the terms and subject to the conditions of the Exchange Offer (including, if the Exchange Offer is extended or amended, the terms and conditions of the extension or amendment (see “The Exchange Offer—Conditions to Consummation of the Exchange Offer”)), DuPont will accept for exchange and will exchange, for shares of N&B common stock owned by DuPont, the DuPont common stock validly tendered, and not properly withdrawn, prior to the expiration of the Exchange Offer, promptly after the expiration date.

 

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The exchange of DuPont common stock tendered and accepted for exchange pursuant to the Exchange Offer will be made only after timely receipt by the Exchange Offer Agent of (a) in the case of shares delivered by book-entry transfer through The Depository Trust Company, confirmation of a book-entry transfer of those shares of DuPont common stock in the Exchange Offer Agent’s account at The Depository Trust Company, pursuant to the procedures set forth in the section below entitled “—Procedures for Tendering,” (b) the letter of transmittal for shares of DuPont common stock, properly completed and duly executed (which eligible holders of DRS shares may complete through the Exchange Offer Agent’s election website), with any required signature guarantees, or, in the case of a book-entry transfer through The Depository Trust Company, an agent’s message and (c) any other required documents.

For purposes of the Exchange Offer, DuPont will be deemed to have accepted for exchange, and thereby exchanged, DuPont common stock validly tendered and not properly withdrawn if and when DuPont notifies the Exchange Offer Agent of its acceptance of the tenders of those shares of DuPont common stock pursuant to the Exchange Offer.

On or prior to the time of consummation of the Exchange Offer, and prior to the Merger, DuPont will irrevocably deliver to the Exchange Offer Agent a book-entry authorization representing all of the shares of N&B common stock outstanding owned by it, with irrevocable instructions to hold the shares of N&B common stock in trust for DuPont stockholders that are receiving shares of N&B common stock in the Exchange Offer and the Clean-Up Spin-Off. Immediately prior to the Merger, by virtue of the delivery of such shares and the satisfaction prior to the Merger of the conditions to the Distribution and DuPont’s acceptance of all shares tendered in the Exchange Offer, those entitled to shares of N&B common stock in the Exchange Offer or the Clean-Up Spin-Off will be considered the beneficial owners of such shares. The Exchange Offer Agent will continue to hold the shares of N&B common stock in trust for the benefit of those N&B stockholders pending the consummation of the Merger. At the effective time of the Merger, those shares of N&B common stock held in trust by the Exchange Offer Agent will automatically convert into the right to receive shares of IFF common stock and, following the effective time of the Merger, once the final number of shares of N&B common stock received by each N&B stockholder is determined, the Exchange Agent will deliver the appropriate number of shares of IFF common stock based on the terms of the Merger Agreement. Consistent with its obligations under the Exchange Act, DuPont intends to distribute shares of N&B common stock to those DuPont stockholders whose shares are tendered, and accepted, in the Exchange Offer, promptly.

Upon surrender of the documents required by the Exchange Offer Agent, duly executed, each former holder of shares of DuPont common stock will receive from the Exchange Agent in exchange for their shares of N&B common stock shares of IFF common stock and/or cash in lieu of fractional shares of IFF common stock, as the case may be. You will not receive any interest on any cash paid to you, even if there is a delay in making the payment. For the avoidance of doubt, those receiving shares of N&B common stock solely in the Clean-Up Spin-Off need not complete any documentation and they will receive first, their shares of N&B common stock (which shall not be transferable during the brief period in which they are held) and second, their shares of IFF common stock without any action on their part.

If DuPont does not accept for exchange any tendered shares of DuPont common stock for any reason pursuant to the terms and conditions of the Exchange Offer, shares tendered by book-entry transfer pursuant to the procedures set forth below in the section entitled “—Procedures for Tendering” will be credited to an account maintained within The Depository Trust Company promptly following expiration or termination of the Exchange Offer.

Procedures for Tendering

Shares Held in Book-Entry DRS

If your shares of DuPont common stock are held in book-entry via the DRS, you must deliver to the Exchange Offer Agent a properly completed and duly executed letter of transmittal, along with any required signature guarantees and any other required documents.

 

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Shares Held Through a Broker, Dealer, Commercial Bank, Trust Company or Similar Institution

If you hold shares of DuPont common stock through a broker, dealer, commercial bank, trust company or similar institution and wish to tender your shares of DuPont common stock in the Exchange Offer, you should follow the instructions sent to you separately by that institution. In this case, you should not use a letter of transmittal to direct the tender of your DuPont common stock. If that institution holds shares of DuPont common stock through The Depository Trust Company, it must notify The Depository Trust Company and cause it to transfer the shares into the Exchange Offer Agent’s account in accordance with The Depository Trust Company’s procedures. The institution must also ensure that the Exchange Offer Agent receives an agent’s message from The Depository Trust Company confirming the book-entry transfer of your DuPont common stock. A tender by book-entry transfer will be completed upon receipt by the Exchange Offer Agent of an agent’s message, book-entry confirmation from The Depository Trust Company and any other required documents.

The term “agent’s message” means a message, transmitted by The Depository Trust Company to, and received by, the Exchange Offer Agent and forming a part of a book-entry confirmation, which states that The Depository Trust Company has received an express acknowledgment from the participant in The Depository Trust Company tendering the shares of DuPont common stock which are the subject of the book-entry confirmation, that the participant has received and agrees to be bound by the terms of the letter of transmittal (including the instructions thereto) and that DuPont may enforce that agreement against the participant.

The Exchange Offer Agent will establish an account with respect to the shares of DuPont common stock at The Depository Trust Company for purposes of the Exchange Offer, and any eligible institution that is a participant in The Depository Trust Company may make book-entry delivery of shares of DuPont common stock by causing The Depository Trust Company to transfer such shares into the Exchange Offer Agent’s account at The Depository Trust Company in accordance with The Depository Trust Company’s procedure for the transfer. Delivery of documents to The Depository Trust Company does not constitute delivery to the Exchange Offer Agent.

Shares Held in the DuPont RSP

If you hold DuPont common stock through the DuPont RSP, you can elect to either keep your shares of DuPont common stock or exchange some or all of your shares of DuPont common stock for shares of N&B common stock. You will receive instructions from Bank of America, N.A. via letter or email informing you how to make an election and the deadline for making an election. If you do not make an active election prior to the applicable deadline, none of the shares of DuPont common stock attributable to your account under the DuPont RSP will be exchanged for shares of N&B common stock. Upon the closing of the Merger, any shares of N&B common stock attributable to your account will be converted into the right to receive shares of IFF common stock.

If you do not elect to exchange some or all of the shares of DuPont common stock attributable to your account for shares of N&B common stock, you may still receive shares of N&B common stock in the Clean-Up Spin-Off in respect of the shares of DuPont common stock attributable to your account. DuPont is unable to predict how many shares of N&B common stock you would receive in the Clean-Up Spin-Off. Upon the closing of the Merger, any shares of N&B common stock attributable to your account will be converted into the right to receive shares of IFF common stock.

If the offer to exchange shares of DuPont common stock for N&B common stock (which will be automatically converted to shares of IFF common stock in the Merger) is oversubscribed, the number of shares of DuPont common stock that you elect to exchange will be reduced on a pro rata basis. Any proration of the number of shares accepted in the Exchange Offer will be determined on the basis of the proration mechanics described under “—Terms of the Exchange Offer—Proration; Tenders for Exchange by Holders of Fewer than 100 Shares of DuPont Common Stock.”

General Instructions

Do not send letters of transmittal to DuPont, IFF, N&B or the information agent. Letters of transmittal for DuPont common stock should be sent to the Exchange Offer Agent at an address listed on the letter of transmittal.

 

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Trustees, executors, administrators, guardians, attorneys-in-fact, officers of corporations or others acting in a fiduciary or representative capacity who sign a letter of transmittal or stock powers must indicate the capacity in which they are signing and must submit evidence of their power to act in that capacity unless waived by DuPont.

The Exchange Offer Agent must receive the letter of transmittal for DuPont common stock at the address set forth on the back cover of this prospectus prior to the expiration of the Exchange Offer. Alternatively, in case of a book-entry transfer of DuPont common stock through The Depository Trust Company, the Exchange Offer Agent must receive the agent’s message and a book-entry confirmation prior to such time and date.

Letters of transmittal for DuPont common stock must be received by the Exchange Offer Agent. Please read carefully the instructions to the letter of transmittal you have been sent. You should contact the information agent if you have any questions regarding tendering your DuPont common stock.

Signature Guarantees

Signatures on all letters of transmittal for DuPont common stock must be guaranteed by a firm which is a member of the Securities Transfer Agents Medallion Program, or by any other “eligible guarantor institution,” as such term is defined in Rule 17Ad-15 under the Exchange Act (each of the foregoing being a “U.S. eligible institution”), except in cases in which shares of DuPont common stock are tendered for the account of a U.S. eligible institution.

If shares of DuPont common stock held through the DRS are registered in the name of a person other than the person who signs the letter of transmittal, the letter of transmittal must be accompanied by appropriate stock powers signed exactly as the name or names of the registered owner or owners appear on the letter of transmittal accompanying the tender of shares of DuPont common stock held through the DRS without alteration, enlargement or any change whatsoever, with the signature(s) on the letter of transmittal or stock powers guaranteed by an eligible institution.

Guaranteed Delivery Procedures

If you wish to tender shares of DuPont common stock pursuant to the Exchange Offer but (i) you cannot deliver the shares or other required documents to the Exchange Offer Agent on or before the expiration date of the Exchange Offer or (ii) you cannot comply with the procedures for book-entry transfer through The Depository Trust Company on a timely basis, you may still tender your DuPont common stock, so long as all of the following conditions are satisfied:

 

   

you must make your tender by or through a U.S. eligible institution;

 

   

on or before the expiration date, the Exchange Offer Agent must receive a properly completed and duly executed notice of guaranteed delivery, substantially in the form made available by DuPont, in the manner provided below; and

 

   

no later than 5:00 p.m. on the second NYSE trading day after the date of execution of such notice of guaranteed delivery, the Exchange Offer Agent must receive: (i) in the case of shares delivered by book-entry transfer through The Depository Trust Company, confirmation of a book-entry transfer of those shares of DuPont common stock in the Exchange Offer Agent’s account at The Depository Trust Company, (ii) a letter of transmittal for shares of DuPont common stock properly completed and duly executed (including any signature guarantees that may be required) or, in the case of shares delivered by book-entry transfer through The Depository Trust Company, an agent’s message and (iii) any other required documents.

Registered stockholders (including any participant in The Depository Trust Company whose name appears on a security position listing of The Depository Trust Company as the owner of DuPont common stock) may transmit the notice of guaranteed delivery by e-mail transmission or mail it to the Exchange Offer Agent. If you hold

 

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DuPont common stock through a broker, dealer, commercial bank, trust company or similar institution, that institution must submit any notice of guaranteed delivery on your behalf.

If, after the expiration date, any stockholder that delivered a valid notice of guaranteed delivery fails to deliver the item(s) required above by 5:00 p.m. on the second NYSE trading day after the date of execution of such notice of guaranteed delivery, DuPont may elect, in its sole discretion, to waive the guaranteed delivery, at which point such shares of DuPont common stock will not be accepted in the Exchange Offer and no shares of N&B common stock will be received in exchange therefore. DuPont currently does not expect to accept any shares identified in a notice of guaranteed delivery after such time.

Any DuPont stockholder who validly tenders (and does not properly withdraw) shares of DuPont common stock for shares of N&B common stock and whose shares are accepted in the Exchange Offer will waive their rights with respect to such shares to receive, and forfeit any rights to, shares of N&B common stock distributed on a pro rata basis to DuPont stockholders in the Clean-Up Spin-Off. Such stockholders will have waived their rights to shares of N&B common stock in the Clean-Up Spin-Off notwithstanding the fact they held shares of DuPont common stock on the record date. As such, DuPont stockholders whose shares are validly tendered, and accepted, in the Exchange Offer, will not receive shares of N&B common stock in the Clean-Up Spin-Off in respect of such shares (but may with respect to any other shares that are not validly tendered and accepted). Further, if a DuPont stockholder has delivered, prior to one minute after 11:59 p.m, New York City time, on the expiration date, a properly completed and duly executed notice of guaranteed delivery in accordance with the terms of the Exchange Offer, and such stockholder fails to complete the appropriate steps to complete their tender of shares (as set forth above) by 5:00 p.m. on the second NYSE trading day after the date of execution of such notice of guaranteed delivery and the expiration date for the Exchange Offer has passed, then DuPont may elect (and currently expects) not to accept for exchange from such stockholder those shares that were the subject of the notice of guaranteed delivery. In such instance, because such shares will not have been accepted in the Exchange Offer, they shall not be subject to the foregoing waiver.

Tendering Your Shares After the Final Exchange Ratio Has Been Determined

DuPont will announce the final exchange ratio used to determine the number of shares that can be received for each share of DuPont common stock accepted in the Exchange Offer by press release, and it will be available on the website www.dupontexchangeoffer.com, in each case by 11:59 p.m., New York City time, at the end of the second trading day (currently expected to be January 27, 2021) immediately preceding the expiration date of the Exchange Offer (currently expected to be January 29, 2021), unless the Exchange Offer is extended or terminated.

If you are a registered stockholder of DuPont common stock, and you wish to tender your shares after the final exchange ratio has been determined, but you believe you would be unable to deliver an original executed letter of transmittal to the Exchange Offer Agent prior to the expiration of the Exchange Offer at one minute after 11:59 p.m, New York City time, on the expiration date, then you should consider instead tendering your shares by means of delivering a notice of guaranteed delivery prior to such time and complying with the guaranteed delivery procedures described above. If you hold DuPont common stock through a broker, dealer, commercial bank, trust company or similar institution, that institution must tender your shares on your behalf.

The Depository Trust Company is expected to remain open until 6:00 p.m., New York City time, on the last trading day prior to the expiration of the Exchange Offer, which is also the expiration date, and institutions may be able to process tenders for DuPont common stock through The Depository Trust Company during that time (although there is no assurance that this will be the case). Once The Depository Trust Company has closed, participants in The Depository Trust Company whose name appears on a Depository Trust Company security position listing as the owner of DuPont common stock will still be able to tender their DuPont common stock by delivering a notice of guaranteed delivery to the Exchange Offer Agent via e-mail so long as it is received prior to the expiration of the Exchange Offer.