Kandidatafhandling om DuPonts opkøb af Danisco

Christian Lund & Lars-Emil Fermann

Student thesis: Master thesis


This thesis investigates potential value-enhancing opportunities for E. I. du Pont de Nemours and Company (DuPont) in an acquisition of Danisco A/S, a Danish mid-cap enzyme company. Danisco has since its foundation in 1989 incorporated a series of strategic initiatives leading to significant changes. Historically Danisco has been a regional manufacturer with sales of homogeneous goods in highly competitive markets. Focus on cost effectiveness and efficiency has enabled competitive advantages. Since the new CEO Alf Duch-Pedersen introduced and implemented a new strategy in 1997, Danisco has changed strategic focus from being a regional operating retail company, to a global market leader providing innovative, sustainable and bio-based ingredient solutions. Creating growth, based on sustainable solutions contributing to solve social problems and focus on sustainability, is a mutual strategy of DuPont and Danisco. After DuPont acquired Danisco several value-enhancing opportunities for DuPont were identified. The findings of strategic and financial analyses served as input for a valuation of Danisco’s stand-alone value. We find Danisco’s estimated share price to be valued at DKK 534 per share before DuPont’s interest in Danisco was publicly disclosed. The estimated share price of Danisco including effect of synergies was valuated to DKK 644 per share. Compared to the actual price DuPont paid for Danisco of DKK 700 per Share, the findings show that Dupont acquired Danisco at a discount of 8 % below our estimate. In our valuation we find it impossible that DuPont can gain more than 4.03 % in cost reduction through the acquisition. DuPont’s willingness to pay DKK 700 pr. share underline a strong SELL recommendation to Danisco’s shareholders. Though, the estimated value is very sensitive to changes in particularly WACC, NOPLAT and the assumed growth applied in the horizon period. There are no obvious issues that could prevent the acquisition. We have made an integration plan that should help realize the fully synergy potential.

EducationsMSc in Auditing, (Graduate Programme) Final Thesis
Publication date2011
Number of pages130