Frutarom Acquires the Savory Activity of Chr. Hansen Group in Italy

By Frutarom Industries Ltd, PRNE
Wednesday, May 25, 2011

HAIFA, Israel, May 26, 2011 -

- The Activitiy's 2010 Sales Totaled Approx. US$ 24.3 M
(Approx EUR 18.3 M)

- Frutarom Continues to Implement its Rapid Growth Strategy and
Carry out Strategic Acquisitions

- Continues to Establish its Position as a Leading Provider of
Savory Solutions

Frutarom Industries Ltd. (LSE: FRUTq, TASE: FRUT, OTC: FRUTF)
announced today that it has signed an agreement to acquire the Savory
activity and assets of Chr. Hansen Italy (Christian Hansen ITALIA S.p/a,
hereunder: "Chr. Hansen") for a cash payment of approximately US$ 35.2 M
(Euro 25 M). The activity's 2010 sales totaled approximately US$ 24.3 M
(approximately Euro 18.3 M) and its operational margin came to 15%. The data
are based on unaudited documents provided by Chr. Hansen. The acquisition
will be subject to the approval of antitrust authorities. Frutarom estimates
that the acquisition will be finalized within the coming weeks.

The Savory activity of Chr. Hansen develops, produces and
markets innovative savory solutions (the non-sweet taste spectrum) including
flavors, seasoning compounds and functional ingredients for the food
industry, with special emphasis on processed meat and convenience food
applications. The acquired activity is a leader in savory solutions with an
extensive customer base comprised mainly of the leading Italian meat
processors; the activity also enjoys sales in Russia, Ukraine, Poland, Czech
and France. The acquisition will provide Frutarom a substantial
presence in Italy where the Company's local presence has been slight, and
will serve as a platform on which to expand into this important market.
Included among the assets purchased is a state-of-the-art, high-capacity
plant located in Parma, Italy that will enable Frutarom to increase its
activities and to take advantage of operational synergies with its existing
savory activities in Europe. Also included among the assets are innovative
R&D laboratories. The acquired activity employs some 45 employees augmenting
the Frutarom workforce with skill and experience at all levels, including in
R&D and sales.

The acquired activity is highly synergetic with Frutarom's
current savory competencies in Europe which have grown significantly in
recent years with a number of acquisitions, including the German companies
Gewurzmuller and Nesse (acquired in 2007 and 2006 respectively), the German
Savory Functional Systems activity of Chr. Hansen (acquired in 2009) along
with the acquisitions of EAFI and Rieber completed in early 2011. This
acquisition is additional step in establishing Frutarom's leading European
position as a savory solution provider.

According to President and Chief Executive Officer of
Frutarom, Ori Yehudai: "This acquisition is a continuation of Frutarom's
rapid growth strategy, and further solidifies its position as one of the top
ten flavor companies and as a leading global producer of savory solutions.
The acquisition will join Frutarom's successful group of savory activities,
maximizing Frutarom's existing synergies in the field. We will strive to take
advantage of the cross-selling opportunities offered by this acquisition and
to exploit to the fullest extent the commercial and operational synergies
across the relevant countries in order to reach optimal operational
efficiencies and maximal savings."

"The acquired activity holds significant market share in the
fields of savory flavors and processed meat in Italy, and it will strengthen
Frutarom's positioning among these customers while significantly increasing
Frutarom's local presence and market share in this important market. The
acquisition considerably boosts both Frutarom's technological capabilities
and its product offering to customers worldwide in the field of savory
flavors and functional products, as well as Frutarom's extensive global
customer base."

Yehudai added, "Frutarom is highly experienced in making
acquisitions, in identifying synergies and pursuing the many cross-selling
opportunities that arise when combining the acquired activity with that of
the Group. We are confident that this acquisition will also contribute to
Frutarom's continued fast and profitable growth and will create added value
for our customers, our employees and our shareholders.

Yehudai concluded by saying, "The acquisition of the Savory
activity of Chr. Hansen in Italy is Frutarom's third acquisition this year.
Frutarom is continuously seeking additional strategic acquisitions of
companies and activities in its field. We are acting to further realize the
potential of our excellent acquisition pipeline, both in developed markets
(such as the US and Western Europe) and emerging target markets in Asia,
Central and South America, and Eastern Europe. We believe that our solid
capital structure and ability to produce cash flow from operating activities,
together with the support of the world's leading banks, will enable us to
further implement additional acquisitions".

About Frutarom:

Frutarom is a multinational company, operating in the global
field of flavors and specialty fine ingredients. Frutarom has significant
production and development centers on three continents and it markets and
sells over 20,000 products in five continents to over 13,000 customers in
more than 120 countries. Frutarom's products are intended mainly for the
food, beverage, flavor, fragrance, pharmaceutical, nutraceutical, health
food, functional food, food additive, and cosmetic industries.

Frutarom, which employs roughly 1,500 employees worldwide,
operates through two main divisions:

- The Flavors Division, which develops, produces and markets
flavor compounds and food systems.

- The Specialty Fine Ingredients Division, which develops,
produces and markets natural flavor extracts, natural functional food
ingredients, natural pharmaceutical/nutraceutical extracts, specialty
essential oils and citrus products, and aroma chemicals.

Frutarom's products are produced at its plants in the United
, England, Switzerland, Germany, Israel, China, and Turkey. The
Company's global marketing organization includes branches in Israel, the
United States
, England, Switzerland, Germany, Belgium, Holland, Denmark,
France, Hungary, Romania, Russia, Ukraine, Kazakhstan, Belarus, Turkey,
Brazil, Mexico, Costa Rica, China, Japan, Hong Kong, India and Indonesia. The
Company also works through local agents and distributors worldwide.

For further information, visit our website:

    Company Contact:
    Ori Yehudai, President & CEO
    Frutarom Ltd.
    Tel: +97299603800


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