Two international companies recently approached Israeli flavor and fine ingredients giant Frutarom Industries to discuss the possibility of acquiring it, Israel media reported Wednesday.
Frutarom said it had not reached any agreements on any deal.
The Haifa-based company has a market value of $5.5 billion and any acquisition deal could be worth $6 billion to $6.5 billion.
One of the interested companies was U.S.-based International Flavors & Fragrances, the No. 2 player in the sector. The other interested party was said to be Germany's Symrise.
Both companies declined to comment on potential negotiations.
In a statement to the Tel Aviv Stock Exchange, Frutarom said it held talks from time to time on possible strategic measures, including mergers or acquisitions.
"The company has not reached any agreements with any party regarding a deal and there is no certainty that such talks will lead to an agreement for a deal or what the terms would be. The company continues to focus on achieving its business targets," Frutarom said.
Two bankers familiar with the industry said the flavors and fragrances sector is expected to see consolidations in coming months.
"Everyone is talking to everyone, and that also involves Frutarom," one banker said.
Frutarom itself has been growing through a steady stream of acquisitions in recent years, and bought 12 firms in 2017.
But as Frutarom has managed the acquired firms at arm's length, some potential buyers are deterred by what they view as an overly complex corporate structure.
While a grab for market share by one of the top players in the industry cannot be ruled out, moves by consumer goods producers entering the industry are also a possibility, the sources said.
Frutarom reported a 23.7% rise in fourth-quarter sales to a record $357.5 million. The company expects 2018 to be another record year. It is targeting $2.25 billion in sales by 2020.
