BASF Agrees to Buy Verenium as It Attacks DuPont, Novozymes

BASF SE (BAS), the world’s biggest chemical maker, agreed to buy Verenium Corp. (VRNM) to pursue growth in biotechnology and close the gap on market leaders DuPont Co. and Novozymes A/S (NZYMB) in the $3 billion industrial enzyme industry.

The cash purchase of the San Diego-based company for $4 a share, or about $62 million including debt, gives BASF a gene pool that can be combined with its existing enzymes, it said in a statement today. The price paid is 56 percent higher than the six-month average price of Verenium.

‘We believe this deal should enhance the growth profile of BASF’s enzymes franchise, and herald a significant longer-term shift in the competitive landscape in industrial enzymes and agricultural enzymes for Novozymes and DuPont,’’ Laurence Alexander, an analyst at Jefferies, said in a note.

While small in size, BASF’s acquisition is a sign that Chief Executive Officer Kurt Bock is committed to breaking the strangehold of the two leading rivals. Chemical companies use enzyme technology to produce ingredients and enhance the performance of products such as animal feeds and detergents. Verenium, which has collected microbes from diverse environments including volcanoes and rainforests, brings 10 industrial enzymes derived from bacteria and fungi.

“BASF, by buying Verenium is gaining market share, and more importantly access to a large and diverse enzyme library that we anticipate will expand and accelerate BASF’s product offerings,” said Mark Emalfarb, CEO of Dyadic International Inc.. (DYAI) The enzyme platform provider received a $6 million upfront payment from the German company as part of cooperation accord. Dyadic’s so-called C1 enzyme technology platform and Verenium’s gene library “are highly complementary.”

To contact the reporter on this story: Andrew Noel in London at anoel@bloomberg.net

To contact the editor responsible for this story: Simon Thiel at sthiel1@bloomberg.net

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