Acquisition further strengthens DuPont’s position in the industrial biotechnology field.

DuPont will acquire Danisco for $5.8 billion in cash and assumption of $500 million of Danisco net debt. The acquisition is expected to be financed with roughly $3 billion in existing cash while the remainder will be done in debt. The transaction is expected to close early in the second quarter.

The deal further strengthens DuPont’s position in the industrial biotechnology field with science-intensive innovations that address global challenges in food production and reduced fossil fuel consumption.

“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,” says DuPont chair and CEO Ellen Kullman. “Danisco has attractive, market-driven science businesses that offer clear synergies with DuPont Nutrition & Health and Applied BioSciences.”

Based in Denmark, Danisco is a technology-driven organization, with research and application development capabilities. It produces a number of food ingredients and enyzyme/bio-based solutions. The company’s food division generates about 65% of total sales, focusing on bioactives (cultures and natural sweeteners) and enablers (emulsifiers, pectin, gums, and systems) such as vegetable oils, citrus peel, sea weed, corn, and soy meal, all of which offer increased functionality to processed foods. Genencor, its enzymes division, represents 35% of total sales, catering to industries such as bioethanol and carbohydrate processing.

DuPont and Danisco have a history of collaborations. In May 2008, DuPont and Genencor entered into a joint venture to create DuPont Danisco Cellulosic Ethanol (DDCE), a 50/50 global joint venture to develop and commercialize the production of cellulosic ethanol. In January 2009, DDCE opened a cellulosic ethanol demonstration facility in conjunction with the University of Tennessee and Genera Energy.

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