The agreement builds on Bunge’s earlier equity investment in Solazyme, and the letter of intent signed by both firms in December 2010 that contemplates a manufacturing joint venture for the production of tailored oils at Bunge’s sugar cane mills in Brazil.

Under the terms of the agreement, Solazyme will leverage its algal fermentation technology in combination with Bunge’s oil processing and milling capabilities to cost-effectively produce targeted triglyceride oils. Development will take place at Bunge’s facility in Moema, Brazil, and at Solazyme’s laboratories in South San Francisco and Campinas, Brazil.

To further align the incentives of both parties, the two companies also entered into a Warrant Agreement. This agreement issues a warrant to Bunge for shares of Solazyme that vests upon the successful completion of key milestones, ultimately targeting the construction of a commercial facility with 100,000 metric tons of output oil coming online in 2013.

From the May 9, 2011, Prepared Foods' Daily News.