A blow to the stock market: The flavor giant APP will...

About two years after joining trading on the Tel Aviv Stock Exchange, and having so far yielded investors a negative return of about 24%, the IFF (IFF) share is on its way to being delisted from the stock exchange.

In recent years, quite a few dual companies have been delisted from trading on the local stock exchange – ones that until then were traded on both the Israeli stock exchange and abroad, usually on Wall Street. These companies are easier to delete from trading in Tel Aviv. 90 days they are delisted from trading and remain to be traded only on the foreign stock exchange, in contrast to other companies, which are required to submit a takeover bid in order to become a private company and delete them from trading – a longer and more expensive route.

It’s hard to say that APP’s deletion from trading is a huge surprise. Unlike other dual companies that were eliminated in previous years, this is not an Israeli company with roots in the Israeli market and the local capital market. APP came to be traded on the stock exchange following a transaction it made, when it acquired Frutarom about two years ago – a long-standing Israeli industrial company.

The deletion of Mellanox in 2013 caused a stir

Its deletion from trading may be a blow to the stock exchange – to the prestige of the stock exchange and to trading on it, because APP also belongs to the leading stock index, Tel Aviv-35, but it is not similar to cases in which large Israeli companies were delisted.

For example, in 2013 the share of the technology company Mellanox was written off with great fanfare and with allegations of onerous regulation in Israel, and in 2015-2016, the shares of Ituran and Silicon were written off (over the years, smaller dual companies were also written off).

APP’s move is somewhat reminiscent of that of the large pharmaceutical company Mylan, which came to trade in Tel Aviv in 2015 as part of its takeover of Perrigo, and decided to be wiped out after two years, after concluding that “continued trading in Tel Aviv does not stand In line with the good of society. “

Another foreign pharmaceutical company, Ofko, began trading in Tel Aviv following the acquisition of the Israeli Prolor in 2013; In 2018, the company decided to be delisted, but a few weeks later regretted and decided to stay on the local stock exchange, where it is still traded today. Perrigo is also a foreign company that has been traded in Tel Aviv for a long time, since it acquired the local Agis.

Ofco and Perrigo were considered successful examples, which in the past led the stock exchange to woo American companies in the biomed field and persuade them to register for trading in Tel Aviv – a move that failed because the listed companies yielded poor returns for investors, and were eventually wiped out.

In the past year, another American company was added to the stock exchange, Powerflit – a company created from a merger of Pointer from Israel (which was deleted from trading due to the merger) and ID Systems from the USA. LivePerson is also an American company that has been traded in Israel for several years.

Arrived because of Frutarom, leaving in the shadow of the DuPont deal

APP, a manufacturer of raw materials and flavor extracts for the food industry, announced its intention to be delisted from trading in Tel Aviv, and accordingly the write-off will take place in about three months, on January 20, 2021. APAP shares will continue to be traded on the New York Stock Exchange and the stock exchange. Euronext Paris. The Tel Aviv Stock Exchange announced that the stock would fall from the indices on December 3.

APP began trading on the local stock exchange after acquiring Frutarom in 2018 in a $ 7.1 billion deal. On the day of the report on the APAP-Frutarom deal, the company’s CEO at the time, Uri Yehudai, was interviewed and said: “APAP will list its shares for trading on the Israeli stock exchange and there will be a very good connection between the companies. There is an excellent story here for the Israeli economy and also for the stock market. “A global industrial company with a market value of a little less than $ 20 billion will be traded here, similar to Teva or maybe just a second to Teva.” $ 12.1 billion, and drowned at about $ 10.2 billion.

The Frutarom deal also turned out to be more complex than it seemed at the time. In 2019, about a year after the acquisition, APP reported that as part of the merger process between the companies, it learned that Frutarom’s activities in Russia and Ukraine had made “improper payments” to representatives of the company’s customers. AFP then admitted that such payments had indeed been made, “and key personnel in Frutarom’s senior management were aware of this.” About six months ago, it was made public that the offices of the National Fraud Investigation Unit in the Israeli regime had interrogated several senior members of the company in the past: Yehudai, Alon Granot, who served as vice president, Ari Rosenthal, who was responsible for Russia and Ukraine, and Guy Gil, vice president. They were investigated on suspicion of bribery of a foreign public servant, reporting offenses under the Securities Authority Act, false registration in corporation documents, fraud and breach of trust in a corporation.

At the same time, nearly a year ago, APP announced a much larger deal, in which it would merge with the nutrition division of the American chemical giant Dupont, in a stock deal valued at $ 26 billion at the time. This transaction has not yet been completed.