Chemicals giant DuPont has moved to beef up its presence in the fast-expanding biofuels market with the announcement it is to acquire Danish food and biotechnology company Danisco in a $5.8bn deal.
Under the terms of the deal, which was announced yesterday, DuPont will also assume $500m of Danisco's net debt. DuPont chair and chief executive Ellen Kullman said the acquisition would establish the company as a leader in industrial biotechnology.
Analysts signalled that Danisco's expertise as a developer of enzymes and chemicals for the biofuels industry had been one of the main drivers behind the deal, noting that DuPont is already in partnership with Genencor, a Danisco subsidiary that produces biofuels from grasses and waste plant matter.
Alongside Genencor, which accounts for 35 per cent of Danisco's total sales, the company has a specialty food ingredients business, which Morten Imsgaard, an analyst at Danish bank Sydbank, told Associated Press may not be of much interest to Dupont.
The deal, which is expected to close in the second quarter subject to regulatory approval, further underlines investor interest in the emerging biofuels sector.
It also comes just days after the EU granted regulatory approval of Shell's proposed takeover of Brazilian biofuels giant Cosan, removing one of the main obstacles for the proposed $12bn deal.
