DSM may bid for DuPont nutrition and biosciences segment
DSM could be a bidder for DuPont’s nutrition and biosciences business, which was reported to be on the selling block last month, according to a report in Bloomberg. The business, which generated about $3.09 billion revenue for the six months ended 30 June, makes food ingredients, personal care products, and other specialty chemicals.
A deal, which could be worth as much as $20.8 billion, could be a plus for both companies, according to Laurence Alexander, an analyst with Jefferies (New York). “Each could also see valuations step higher if the market continues to favor focus over diversification,” Alexander adds.
An asset swap may also make sense, according to Alexander. “DSM’s … materials business could be an attractive complement for [DuPont’s] aramids and thermoplastics,” he says.
In August, DuPont said that a Reverse Morris Trust or a tax-free merger with another company are also possible outcomes for nutrition and biosciences. Aside from that division, DuPont has earmarked $2 billion worth of revenue as noncore assets, including photovoltaics, biomaterials, and the Hemlock semiconductor joint venture, which are likely slated for divestiture.