The EI DuPont de Nemours & Co. (DD) and the Danisco A/S bid took yet another turn, with DuPont increasing its offer price by 5.3%. After failing to win enough investor support for its initial takeover bid, DuPont has agreed to acquire Danisco for a total of 33.4 billion kroner ($6.63 billion).
Danisco shareholders would receive 700 kroner a share, up from its prior proposal of 665 kroner. DuPont lowered the minimum number of shares in the tender offer to 80% from 90%.
We believe the deal would enable Dupont to enter a niche in the chemical industry, food additives, long dominated by its rivals International Flavors & Fragrances Inc. (IFF). DuPont is focused on capturing $1 billion in working capital productivity gains during 2011−2013.
The company is also on track to achieve a combined $600 million in benefits from fixed cost productivity and restructuring actions. It is executing strategies for further development and growth of new products, particularly for agriculture, photovoltaics, alternative energy and materials.
Furthermore, the company’s focus on the emerging markets, along with a strong performance in the Agriculture & Nutrition segment, is expected to generate top-line growth in future.
Currently, DuPont has a Zacks #2 Rank (Buy) for the short term and an Outperform recommendation for the long term.
DU PONT (EI) DE (DD): Free Stock Analysis Report
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