Danisco Acquisition

12 Months Ended

Dec. 31, 2011

Danisco Acquisition [Abstract]

Danisco Acquisition

DANISCO ACQUISTION

In January 2011, DuPont and its wholly owned subsidiary, DuPont Denmark Holding ApS (DDHA), entered into a definitive agreement with Danisco A/S (Danisco), a global enzyme and specialty food ingredients company, for DDHA to make a public tender offer for all of Danisco's outstanding shares at a price of 665 Danish Kroner (DKK) in cash per share. On April 29, 2011, DDHA increased the price of its tender offer to acquire all of the outstanding shares of Danisco to DKK 700 in cash per share.

On May 19, 2011, the company acquired approximately 92.2 percent of Danisco's outstanding shares, excluding treasury shares, pursuant to the previously announced tender offer. From May 19, 2011 to September 22, 2011, DuPont acquired all of Danisco's remaining outstanding shares. This acquisition has established DuPont as a leader in industrial biotechnology with science-intensive innovations that address global challenges in food production and reduced fossil fuel consumption. The Danisco acquisition was valued at $6,417, plus net debt assumed of $617.

As part of the Danisco acquisition, DuPont incurred $85 in transaction related costs during 2011, which were recorded in costs of goods sold and other operating charges. In 2011, Danisco contributed net sales of $1,713 and net income attributable to DuPont of $(7), which excludes $30 after-tax ($39 pre-tax) of additional interest expense related to the debt issued to finance the acquisition. Danisco's contributions included a $125 after-tax ($175 pre-tax) charge related to the fair value step-up of inventories acquired and sold during 2011.

The following unaudited pro forma summary presents DuPont's consolidated results of operations as if Danisco had been acquired on January 1, 2010. These amounts were calculated after conversion from International Financial Reporting Standards to GAAP and adjusting Danisco's results to reflect the additional depreciation and amortization that would have been charged assuming the fair value adjustments to property, plant and equipment, and intangible assets had been applied from January 1, 2010, together with the consequential tax effects. These adjustments also reflect the additional interest expense incurred on the debt to finance the purchase. The 2011 pro forma earnings were adjusted to exclude the acquisition related costs incurred in 2011 and the nonrecurring expense related to the fair value inventory step-up adjustment. The 2010 pro forma earnings were adjusted to include these charges. The pro forma financial information presented below is for informational purposes only and is not indicative of the results of operations that would have been achieved if the acquisition and borrowings undertaken to finance the acquisition had taken place at the beginning of 2010.

	Pro forma for the year ended December 31,
	2011		2010
Net sales	$	39,182	$	34,203
Net income attributable to DuPont	3,724		2,942

The following table summarizes the fair value of the assets acquired and liabilities assumed as of the acquisition date:

Fair value of assets acquired
Cash and cash equivalents	$	48
Accounts and notes receivable 1	522
Inventories 2	709
Property, plant and equipment	1,709
Goodwill 3	2,891
Other intangible assets 4	2,859
Other current and non-current assets	78
Total assets acquired	$	8,816
Fair value of liabilities assumed
Accounts payable and other accrued liabilities	$	489
Short-term borrowings 5	342
Long-term borrowings 5	323
Other liabilities	219
Deferred income taxes 6	1,026
Total liabilities assumed	$	2,399

^1.  The gross amount of accounts and notes receivable acquired was $531, of which $9 was expected to be uncollectible.

^2. The fair value of inventories acquired included a step-up in the value of $175, which was expensed to cost of goods sold and other operating charges in 2011.

^3. Goodwill will not be deductible for statutory tax purposes. Goodwill is attributable to Danisco's workforce and the synergies in technology, operations and market access that are expected from the acquisition. Approximately $900 and $2,000 of goodwill was allocated to the Industrial Biosciences and Nutrition & Health segments, respectively.

^4.  Other intangible assets acquired of $1,002 are indefinite-lived (see Note 10).

^5.  Debt assumed has been paid off as of December 31, 2011.

^6.   The deferred income tax liabilities assumed represent the adjustments for the tax impact of fair value adjustments, primarily relating to definite-lived intangible assets.