DuPont buying Danisco for $6.3 billion
DuPont has entered into a definitive agreement for the acquisition of Danisco, a global enzyme and specialty food ingredients company, for $5.8 billion in cash and assumption of $500 million of Danisco’s net debt. DuPont hopes this deal will catapult the company to a leading position in the industrial biotechnology market, addressing global challenges in food production and reduced fossil fuel consumption.
“Danisco is a premier company, a long-time successful partner of DuPont and a proven innovator committed to sustainable growth,” said DuPont CEO Ellen Kullman. “Danisco has attractive, market-driven science businesses that offer clear synergies with DuPont. This transaction is a perfect strategic fit with our growth opportunities and will help us solve global challenges presented by dramatic population growth in the decades to come, specifically related to food and energy. In addition, biotechnology and specialty food ingredients have the potential to change the landscape of industries, such as substituting renewable materials for fossil fuel processes and addressing food needs in developing economies, that will generate more sustainable solutions and create growth for the company.”
The acquisition is expected to be financed with about $3 billion in existing cash and the remainder in debt. The transaction is expected to close early in the second quarter and be cash and earnings accretive in 2012, the first full year of the combined entity.
DuPont has set its 2011 earnings per share outlook at a range of $3.30 to $3.60 per share. The anticipated impact of this transaction would reduce that outlook by $.30 to $.45 per share on a reported basis.
Danisco has specialty food ingredients, including enablers, cultures and sweeteners, that generate about 65% of total sales; and Genencor, its enzymes division, represents 35 % of total sales. Danisco and DuPont are already joint venture partners in the development of cellulosic ethanol technology. Danisco has nearly 7,000 employees globally with operations in 23 countries.
The acquisition is to be executed through a public tender offer by a subsidiary of DuPont for all of Danisco's outstanding shares at a price of DKK 665 in cash per share. Danisco has stated its intention to recommend the offer to its shareholders subject to and upon publication of the offer document relating to the tender offer following review by the Danish Financial Supervisory Authority. The transaction is subject to customary closing conditions, including certain regulatory approvals and the tender of more than 90% of the Danisco shares in the tender offer. DuPont has the right to waive such tender offer conditions and accept a lesser number of shares in certain cases.
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