International Flavors & Fragrances Inc. (NYSE: IFF) announced on Monday that it will acquire Israeli Frutarom for $7.1 billion, including its net debt, to establish itself as an industry leader in naturals while expanding its customer base and product portfolio.

Under the agreement, IFF will acquire Frutarom in a cash and stock transactions. Frutarom shareholders will receive for each Frutarom share $71.19 in cash and 0.249 of a share of IFF common stock for a total value of $106.25 per share.

Merging the two companies will accelerate IFF’s Vision 2020 strategy to create itself as a global leader in taste, scent and nutrition. The combined company helps deliver more exposure to markets and a stronger platform to deliver to customers.

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

IFF says the acquisition will create significant value creation opportunity and accelerate long-term profitable growth. The company is expected to drive in double-digit cash EPS increase in the second full year. IFF also expects to maintain its quarterly dividend provided in its prior guidance.

In addition to IFF expanding itself to a leader in naturals, it will also acquire Frutarom’s portfolio of natural colors, enzymes, antioxidants and health ingredients. Frutarom has a portfolio of over 70,000 products and its market is expanded into nearly 150 countries.

Following the closing of the transactions, Ori Yehudai, President and CEO of Frutarom will serve as a strategic advisor supporting Fibig. IFF headquarters will be in both New York City and Israel, maintaining in two countries. The new stock will be listed on the New York Stock Exchange and the Tel Aviv Stock Exchange.

IFF reported its first quarter financial results on Monday as well. The company reported net income of $129.41 million on $930.28 million revenue.

For the full year on an adjusted basis, IFF forecasts revenue to grow 6 to 8 percent, while EPS increases by 5.5 to 7.5 percent.