DuPont buys Danisco, no changes expected for cellulosic project

By Kris Bevill | January 10, 2011

Global science-based products and services company DuPont says it will pay nearly $6 billion to acquire enzyme and specialty food ingredient manufacturer Danisco. The purchase agreement, announced by DuPont Jan. 9, is expected to close in the second quarter. DuPont has agreed to pay Danisco $5.8 billion in cash and assume $500 million of its net debt. DuPont will provide approximately $3 billion of the acquisition with existing cash. The company will finance the remainder of the purchase, it said.

DuPont said the acquisition of Danisco will establish it as a leader in industrial biotechnology, particularly in the areas of food production and alternative fuels. “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,” DuPont CEO Ellen Kullman said.

The two companies joined together several years ago to launch DuPont Danisco Cellulosic Ethanol LLC - a 50/50 joint venture focused on commercializing cellulosic ethanol production technology. According to DDCE, DuPont’s portion of the joint venture is focused on engineering, pretreatment and fermentation while Danisco, through its Genencor division, provides the enzyme expertise. DDCE isn’t expecting any immediate changes and operations are so far continuing as usual, according to the company. Last fall, DDCE began evaluating sites for Project Blackhawk, a 25-50 MMgy corn stover ethanol production facility. The company recently decided to locate Project Blackhawk in Iowa, where it will be co-located with an existing ethanol production facility, but has yet to announce the name of its collaborator.

In October, Hutchins said the $300 million project would be financed primarily by its two parent companies. The Iowa Power Fund has also approved a nearly $20 million grant for the project if it locates within the state. The state economic development department said it would provide an additional $5 million financial assistance package and other tax incentives to the project.