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DuPont’s Solae Venture Said to Get Bids From Tate & Lyle, KKR

Aug. 8 (Bloomberg) -- Solae LLC, a soy joint venture owned by DuPont Co. and Bunge Ltd., has drawn offers from companies including Royal DSM NV and Tate & Lyle Plc, said three people with knowledge of the matter.

KKR & Co. and other private-equity firms also bid, said one of the people, who declined to be identified as the process is private. Suitors are studying confidential financial information on the business, which may fetch as much as $1.75 billion, one person said.

First-round bids came in about two weeks ago, and interested parties are receiving management presentations, the people said. Second-round offers for the business, which makes soy products used in cereal bars, infant formula and milk, probably will come in after the U.S. Labor Day holiday, said two of the people. Cargill Inc. looked at Solae and signed a confidentiality agreement, though it hasn’t made a bid, one person said.

DuPont and White Plains, New York-based Bunge created Solae, which employs about 2,400 people, in 2003 by combining two businesses. Wilmington, Delaware-based DuPont owns 72 percent of Solae, while Bunge owns the rest. The venture’s more than 1,000 products include soy proteins used in hot cereals, sports drinks, vegetarian foods and meat products, according to its website.

Potential Bidders

Susan Burns, a Bunge spokeswoman, didn’t return a call seeking comment. Molly Cornbleet, a Solae spokeswoman, and Michael Hanretta, a DuPont spokesman, declined to comment. An external spokesman for London-based Tate & Lyle, a spokeswoman for Heerlen, Netherlands-based DSM and a spokeswoman for New York-based KKR also declined to comment. A Cargill spokeswoman didn’t respond to a call.

Solae management last month began meeting with potential bidders, including private-equity funds and European strategic buyers, two people familiar with the matter said July 25. 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, the people said. Citigroup Inc. is advising on the sale process, according to those people.

DuPont is the third-biggest U.S. chemical maker by sales, trailing Dow Chemical Co. and Exxon Mobil Corp. The company, led by Chief Executive Officer Ellen Kullman, completed the $6.4 billion purchase of food-additives maker Danisco A/S in June.

To contact the reporters on this story: Brett Foley in London at bfoley8@bloomberg.net; Jeffrey McCracken in New York at jmccracken3@bloomberg.net

To contact the editor responsible for this story: Jennifer Sondag at jsondag@bloomberg.net

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