PARIS — After months of buzz, EQT Northern Europe Private Equity Funds has signed an agreement to buy Haarmann & Reimer, the wholly owned fragrance and flavors arm of Bayer AG, for $1.67 billion, the firms said Wednesday. Figures are converted at current exchange rates from the euro.

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EQT also said it will take a majority stake in Dragoco, another fragrance-and-flavors firm, with the intent of merging the two firms into a yet-to-be-named entity. Dragoco and H&R are based in Holzminden, Germany.

EQT will own 76 percent of the new firm, with Dragoco’s chief executive, Horst-Otto Gerberding, heading the new firm and holding 22 percent. German bank NordLB will own the other 2 percent. The deal should close in the fourth quarter after cartel authorities OK it.

The new company should ring up annual sales of $1.256 billion, putting it in the top four, according to Dragoco executives.