ICI, the UK-listed chemicals group, announced today that it has sold Quest, its flavours and fragrance business to Swiss rival Givaudan.

Givaudan will pay £1.2bn in cash for the business, which it will fund through debt and the issue of up to 1bn Swiss francs in equity. In a statement, Givaudan said it expects the acquisition to achieve annual synergies of 150 million francs, with full benefits to be realised after three years. ICI will use the proceeds to pay for deal-related tax and costs, to reduce pension deficits and net debts.

Netherlands-based Quest manufactures flavours and fragrances for home products and foods and accounts for 10% of ICI's total sales. Last year, Quest reported a turnover of £560m. 

The sale is subject to regulatory approval, and is expected to be completed during the first quarter of 2007.