En vurdering af DuPonts synergieffekter gennem real optioner

Brundam Carsten

Student thesis: Master thesis


The object of this thesis is to analyse the American chemistry company DuPont’s acquisition of the Danish based manufacturer of enzymes and food ingredients Danisco. The acquisition was finally approved in May 2011 by the stockholders in Danisco after the bid was raised to 700 Danish krones (DKK). This master thesis will value the expected acquisition synergies of Danisco using the real options paradigm. Real options were originally proposed by Myers in 1977 but subsequent studies have suggested the paradigm for valuing synergies as well. The thesis is divided into five parts and a final conclusion. Parts 1-2 contain a theoretical discussion of strategic acquisition and how synergies emerge. In addition, the theory part gives answer to the foundation of the real options paradigm and how to solve it through relevant models. As real options offsets the shortcomings of the most widely used model – Discount Cash Flow – the model is described in order to clarify the use of real options but also to explain how to estimate the value of the underlying asset. In parts 3-5 the thesis seeks to value the emerging synergies that DuPont was expected to exploit later on. The real options synergies were identified as the divisions DuPont Danisco Cellulosic Ethanol LLC (DDCE) and Food Ingredients. The real options value was respectively estimated to 227.36 mill. and 482.55 mill. DKK. This thesis concludes that the total real options synergies were thus 709.91 DKK, corresponding to the sum of the two real options. In addition it is estimated that the real options synergies did not contribute significantly to DuPont’s decision to acquire Danisco as they were no more than 8.64 per cent of the total value of the synergies. The real options synergies might have had an influence on the stockholders of Danisco to sell as they contribute to an extra premium of 2.13 per cent. These calculations were based on the assumption that the total synergies value were corresponding the premium paid.

EducationsMSc in Finance and Accounting, (Graduate Programme) Final Thesis
Publication date2012
Number of pages90