DuPont Co.'s (DD) acquired full ownership of Solae LLC, its soy-based ingredients venture with Bunge Ltd. (>> Bunge Limited), as it looks to expand its position in the food ingredients market.
DuPont previously owned 72% of the venture while Bunge owned the remaining 28%.
Financial terms of the deal weren't disclosed.
The companies formed the venture in early 2003 to produce and distribute specialty food ingredients. At that time, DuPont estimated initial global revenue from Solae to exceed $800 million annually. In exchange for its specialty-food-ingredients businesses in 2003, Bunge was to receive the 28% interest in the venture plus an estimated $260 million, which was funded by joint-venture debt.
DuPont said its long-term segment financial targets are to post a 7% to 9% compound annual growth rate for sales and to expand pretax earnings margins 12% to 14%. With full ownership of Solae, DuPont expects to reach the upper end of its margin targets with planned synergies.
The chemicals giant last month reported its first-quarter profit rose 4% as higher pricing and a jump in sales of agricultural products contributed to a 12% sales increase.
-By Melodie Warner, Dow Jones Newswires; 212-416-2283; [email protected]