Swiss fragrance and flavor maker Givaudan plans to launch an offer for French natural ingredients group Naturex  after agreeing to buy a half-billion euro minority stake in the firm.

Givaudan on Monday said it had agreed to buy a 40.6 percent stake in Naturex for 522 million euros ($645.66 million), or 135 euros per share, adding it intends to offer the same price for the remaining outstanding shares in a mandatory cash offer.

The deal values Naturex around 1.3 billion euros ($1.61 billion), or a roughly 42 percent premium over its market capitalization before the deal was announced.

Naturex shares jumped 42 percent to 135 euros in early trading, while Givaudan rose 1.5 percent.

Givaudan did not say in its statement from whom it is buying the shares. Combined, the Lippens and Martel families own about 39 percent of Naturex, according to Reuters data.

“The acquisition of a significant shareholding in Naturex fits fully with our 2020 strategy to expand our offering to deliver natural products to our customers,” Givaudan Chief Executive Gilles Andrier said.

“Naturex further complements our capabilities with its strong portfolio of plant extracts and natural ingredients across the food and beverage, nutrition and health and personal care sectors.”

The Swiss group has placed increasing emphasis on natural flavors to align with shifting consumer demand, growing its offerings through a number of acquisitions in recent years.

But the offer for Naturex, which develops natural ingredients through plant extracts and employees 1,700 people at 16 production sites, far exceeds the acquisition appetite the group recently flagged for bolt-on deals and outstrips the size of its other purchases.

The Avignon-based firm had sales of 405 million euros last year.

“Looking at transaction multiples, Givaudan seems to be paying a full price,” Baader Helvea analyst Andreas von Arx said in a note, adding the deal made strategic sense and compared favorably to a similar acquisition by rival Symrise due to its higher profitability.

“It expands exposures to natural ingredients and adds a sizeable (faster) growing business to the Swiss flavor and fragrance leader,” he said.

Givaudan said the deal, which remains subject to regulatory approval, is fully supported by Naturex’s board and management.