(Reuters) - International Flavors & Fragrances Inc IFF.N on Sunday said it will merge with DuPont Inc's DD.N $26.2 billion nutrition & biosciences unit in a deal that will create a new consumer giant valued at more than $45 billion.

Under terms of the agreement, DuPont shareholders will own 55.4% of the shares of the new company and existing IFF shareholders will own 44.6%, IFF said in a statement.

The deal has been unanimously approved by both boards, New York-based IFF said.

Industrial materials maker DuPont will also receive a one-time cash payment of $7.3 billion upon closing of the deal, IFF added.

IFF Chief Executive Officer Andreas Fibig will run the combined company and will also continue to be chairman of the board.

Ireland’s Kerry Group was also negotiating with DuPont for its nutrition unit, Bloomberg had previously reported.

“We conducted a very thorough process leading us to the selection of IFF as the preferred strategic partner for N&B,” DuPont Executive Chairman Ed Breen said.

IFF, which creates flavors and fragrances, works with global brands to develop scents and tastes for products that are household names.

“Together, we will create a leading ingredients and solutions provider with a broader set of capabilities to meet our customers’ evolving needs,” IFF’s Fibig said.

The combination will be executed using a tax-efficient structure called a Reverse Morris Trust, IFF said. Such transactions let a company avoid a big tax bill by spinning off a unit that it wants to divest and simultaneously merging it with another company.

After the deal closes, IFF expects cost savings of about $300 million on a run-rate basis by the end of third year.

The companies said they have obtained fully-committed debt financing from Morgan Stanley and Credit Suisse.

IFF also said its largest shareholder, Winder Investments, has agreed to vote in favor of the deal.

Greenhill & Co and Morgan Stanley advised IFF while Credit Suisse Securities (USA) and Evercore served as DuPont’s advisers.