UPDATE 2-Ingredients firm Symrise to buy Diana for $1.8 bln
* Deal values Diana Group around 1.3 bln euros, inc debt
* To create world No.3 scents and flavours firm
* Symrise may increase capital by 10 pct to fund deal
* Shares in Symrise fall 2.5 pct (Adds comments by CEO, analyst, background)
By Marilyn Gerlach and Natalie Huet
FRANKFURT/PARIS, April 14 (Reuters) - German scents and flavours group Symrise is to buy France's Diana Group for an agreed 1.3 billion euros ($1.8 billion) including debt to narrow the gap on top rival Givaudan and expand in natural ingredients and pet food.
The purchase from private equity group Ardian will make Symrise the world's third-biggest scents and flavours company, up from number four, and help it toward a goal of boosting annual sales by around 1 billion euros by 2020.
Symrise Chief Executive Heinz-Juergen Bertram told reporters on Monday the firm would likely finance the deal via a 10 percent capital increase, as well as a mix of debt and equity.
Based on Symrise's current share price, a sale of 10 percent of its stock would generate around 400 million euros. The acquisition should start adding to earnings per share from 2015 onward, Symrise said. Continued...