Danisco acquisition of enzyme giant Genencor moved back
delayed as the Danish ingredients firm extends its takeover offer
for remaining slice of Genencor International, reports Lindsey
In a €419 million deal announced last month Danisco signed to buy Eastman Chemical's 42 per cent stake in the NASDAQ listed biotech company Genencor. Danisco already has a 42 per cent slice of the firm.
But in a statement today Danisco's CEO Alf Duch-Pedersen said the company has extended the expiration date for its offer until 6 April, due to expire tomorrow.
According to Deutsche Bank Trust Company Americas, which is acting as the depositary for Danisco's offer, on Monday tendered shares amounted to about 97 per cent of Genencor.
Danisco's announcement last month to acquire the US enzyme player is the latest in a string of acquisitions that will go some way to bridging the sales gap once sugar reform, slated for 2006, starts to impact the bottom line.
The Danish ingredients firm will become the world's number two enzyme player, behind the category leader Novozymes.
But the move has surprised observers that had previously predicted Danisco might shuffle off its Genencor stake, to fuel growth and other acquisitions in the food ingredients sector.
Investment in ingredients is deemed essential for the group to counterbalance lost income from the sugar unit. Investment bank Goldman Sachs predicts sugar profits for Danisco could drop by as much as 40 per cent once reform arrives.
Brushing aside criticism of the move, Michael von Bülow, vice president communications and investor relations at Danisco asserts the acquisition fits snugly into the firm's strategy.
"We would like to expand our presence in biotechnology. This acquisition also gives us the opportunity to build on our enzyme knowledge," he recently told FoodNavigator.com.
Not only this, von Bulow claims expertise at Genencor will be transferable to other ingredients units in the group, bringing added value to a range of areas, such as production techniques.
In addition to enzymes, Danisco supplies emulsifiers - where it holds the number one slot - flavours, cultures, bio-preservation, stabilisers, functional systems and sweeteners.
Arguably, some of the surprise in Danisco's move to buy Genencor is sourced in the current assumption that enzymes are not high margin ingredients.
According to a report last month from Business Communications Company, the €1.53 billion enzyme market is currently staring at relatively flat growth of about 2 to 3 per cent, expected up to 2009.
Danish firm Novozymes dominates the enzyme market with about a 50 to 60 per cent share, and Genencor, following behind in second place with about 30 per cent.