DuPont seals Danisco buy for US$5.8b
By Ernest Scheyder and Megan Davies |
January 11, 2011, Tuesday
|
Print Edition
Print Edition
UNITED States chemicals group DuPont said on Sunday it will buy Danish food ingredients and enzymes firm Danisco for US$5.8 billion to boost its position in the fast-growing food sector.
The cash deal would enable DuPont to enter a niche in the chemical industry - food additives - long dominated by smaller rival International Flavors and Fragrances Inc. It would also solidify existing cooperation between the two companies in the field of technology for advanced bioethanol.
However the acquisition will reduce DuPont's 2011 earnings of US$3.30 to US$3.60 per share by a range of 30 cents to 45 cents per share, the company said.
The deal is structured as a public tender offer valuing Danisco's shares at 665 Danish crowns (US$115) in cash per share - a 25 percent premium over its closing price of 530 crowns on Friday.
"The board of directors of Danisco has unanimously resolved that it intends to recommend that shareholders accept the offer," Danisco said in a statement.
DuPont's shares closed on Friday down 22 cents at US$49.76. The company has a market capitalization of about US$45 billion.
The deal weds two very old firms. DuPont was founded in 1802 and Danisco traces its roots back to 1872 and the founding of Danish Sugar.
Traditionally, DuPont has focused on chemicals and safety and protection equipment. The firm is most well known for its iconic Kevlar bulletproof vests and Tyvek homewrap, not biologically engineered corn or soybean.
But DuPont's last high-profile acquisition, its 1999 purchase of seed maker Pioneer for US$7.7 billion, began a strategy shift toward a so-called "mega trend" of food and nutrition.
Many analysts at the time saw the price former CEO Charles Holliday paid as too much, though few dispute now that the Pioneer buyout helped save DuPont during the recession of 2008.
Holliday is now chairman of Bank of America.
The cash deal would enable DuPont to enter a niche in the chemical industry - food additives - long dominated by smaller rival International Flavors and Fragrances Inc. It would also solidify existing cooperation between the two companies in the field of technology for advanced bioethanol.
However the acquisition will reduce DuPont's 2011 earnings of US$3.30 to US$3.60 per share by a range of 30 cents to 45 cents per share, the company said.
The deal is structured as a public tender offer valuing Danisco's shares at 665 Danish crowns (US$115) in cash per share - a 25 percent premium over its closing price of 530 crowns on Friday.
"The board of directors of Danisco has unanimously resolved that it intends to recommend that shareholders accept the offer," Danisco said in a statement.
DuPont's shares closed on Friday down 22 cents at US$49.76. The company has a market capitalization of about US$45 billion.
The deal weds two very old firms. DuPont was founded in 1802 and Danisco traces its roots back to 1872 and the founding of Danish Sugar.
Traditionally, DuPont has focused on chemicals and safety and protection equipment. The firm is most well known for its iconic Kevlar bulletproof vests and Tyvek homewrap, not biologically engineered corn or soybean.
But DuPont's last high-profile acquisition, its 1999 purchase of seed maker Pioneer for US$7.7 billion, began a strategy shift toward a so-called "mega trend" of food and nutrition.
Many analysts at the time saw the price former CEO Charles Holliday paid as too much, though few dispute now that the Pioneer buyout helped save DuPont during the recession of 2008.
Holliday is now chairman of Bank of America.
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