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DuPont, Bunge Said to Seek Sale of Soy-Products Venture

DuPont Co. and Bunge Ltd. are seeking to sell Solae LLC, their joint venture that makes soy products used in foods such as cereal bars, infant formula and milk, said three people with knowledge of the matter.

Solae management this month began meeting with potential bidders, including private-equity funds and European strategic buyers, said two of the people, who asked not to be identified because the process is private. The sale may fetch about $1.4 billion to $1.75 billion based on Solae’s annual earnings of about $180 million before interest, tax, depreciation and amortization, two people said.

DuPont and Bunge formed Solae in 2003 when they merged two businesses. DuPont owns 72 percent of Solae, while Bunge owns the remainder. The venture employs about 2,400 people. Citigroup Inc. is advising on the sale process, the people said.

DuPont Chief Executive Officer Ellen Kullman, who last month closed the 33.4 billion-krone ($6.44 billion) takeover of Danish food-additives maker Danisco A/S, may want to shed Solae before integrating Danisco if the venture is less profitable, said Hassan Ahmed, an analyst at Alembic Global Advisors.

Kullman may “scrap the lower-margin business and redeploy the capital into the faster-growth business,” Ahmed, who rates DuPont “neutral,” said in a telephone interview from New York. “If anytime is a good time to be a seller of agriculture assets, it’s now, because you will clearly get a good price.”

Cereals, Drinks

Michael Hanretta, a spokesman for Wilmington, Delaware-based DuPont, Molly Cornbleet, a Solae spokeswoman, and Mark Costiglio, a Citigroup spokesman, declined to comment when reached by telephone. Susan Burns, a spokeswoman for White Plains, New York-based Bunge, didn’t immediately respond to calls seeking comment.

DuPont in May said it would create a new reporting unit merging Danisco’s food ingredients business with the nutrition and health unit, which includes St. Louis-based Solae.

Solae makes more than 1,000 products, including soy proteins used in hot cereals, sports drinks, vegetarian foods and meat products, according to the venture’s website. Solae’s customers include soymilk maker 8th Continent, created as a joint venture between DuPont and General Mills Inc. in 2000 and sold to Stremicks Heritage Foods in 2008.

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