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. 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 $3.30 to $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 per share.
Shares in Danisco briefly topped the price of the $5.8bn bid from yesterday after the chairman of the Danish food company said the offer was the best of several.
“The board of directors of Danisco has unanimously resolved that it intends to recommend that shareholders accept the offer,” Danisco said in a statement.
The slim premium to DuPont’s offer price suggested some investors were hoping for a counterbid or a higher offer from DuPont. But analysts and traders said there were few suitors with the financial heft to take on DuPont and for whom buying all of Danisco would make strategic sense.
“We do not expect that the bid from DuPont will be topped by others,” Jyske Bank analyst Jens Thomens said in a note to clients.
Danisco’s chairman Jorgen Tandrup said he would be surprised if a counter bidder emerged to rival DuPont’s agreed bid, and did not expect any anti-trust problems with the acquisition.
“There has been a process where several contenders have been involved, and in the final round here there was still competition for the company, and last night we had the winner,” said Tandrup, declining to name any other of the contenders.