DuPont to Buy Danisco for $3.6 Billion

Deal will make DuPont a 'a clear leader in industrial biotechnology'

Danish food ingredient and enzyme company Danisco said in Jan. 10 that it will be acquired by chemical giant DuPont in a deal worth $6.3 billion (4.9 billion euros).

The acquisition of Danisco, a profitable leader in the agri-food and biotechnology sectors, is set to make DuPont "a clear leader in industrial biotechnology," the Wilmington, Delaware-based company said.

The purchase involves $5.8 billion paid in cash and assumption of $500 million of Danisco's net debt, the Wilmington, Delaware-based DuPont announced late on Jan. 29.

Danisco said its board of directors had "unanimously resolved that it intends to recommend the shareholders to accept the offer when made." DuPont needs to acquire 90% of shares to take control of Danisco, with 10% of shareholders having the possibility to block the bid. Jyske Bank analyst Jens Houe Thomsen said it was very unlikely that minority shareholders would block the takeover or that a rival bid would emerge. "Dupont is already partnered with Danisco in the next-generation ethanol sector and it's hard to see other buyers that could justify a higher offer," he said. A number of companies had signaled interest in purchasing Danisco, according to its board chairman Joergen Tandrup.But DuPont, already a partner, apparently presented the best offer.

The Danish company -- a specialist in food ingredients, enzymes and bio-products -- became involved in a joint-venture with the DuPont in 2008 through its Genencor division. The company, DuPont Danisco Cellulosic Ethanol, produces cellulosic ethanol, a renewable biofuel produced from non-food sources.

Danisco was also a leader in the sugar business until it sold that division to a German sugar refiner in 2008 for $1.2 billion.

DuPont chairwoman and CEO Ellen Kullman said Danisco had two global businesses -- a research and development pipeline and specialty food ingredients -- which strongly complemented DuPont's current biotechnology capabilities and offered "attractive long-term financial returns."

The purchase will "create new opportunities across other parts of the DuPont portfolio, including traditional materials science offerings" for the U.S. firm, which produces synthetic material Kevlar and Tyvek homewrap, Kullman added.

"Danisco is a premier company, a long-time successful partner of DuPont and a proven innovator committed to sustainable growth," she said.

Danisco's specialty food ingredients, including enablers, cultures and sweeteners, generate about 65% of its total sales, company officials said.

Danisco, which has 7,000 employees and operates in 23 countries, with sales of $2.37 billion.

Copyright Agence France-Presse, 2011

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