DuPont today announced that it has entered into a definitive agreement with FMC Corporation to divest a portion of DuPont’s Crop Protection business, including certain research and development capabilities, and to acquire substantially all of FMC’s Health & Nutrition business.
FMC will pay DuPont $1.6 billion to reflect the difference in the value of the assets, including cash of $1.2 billion and working capital of $425 million. The divestiture will satisfy DuPont’s commitments to the European Commission in connection with its conditional regulatory clearance of the merger with Dow.
“We believe this agreement is an excellent outcome that serves the best interests of all stakeholders, including our shareholders, customers and employees,” said Edward D. Breen, chairman and chief executive officer of DuPont. “Our intended independent Agriculture company will continue to benefit from the combined, complementary strengths of DuPont and Dow.”
He cited expected expansion “and a robust pipeline across seed germplasm, biotech traits, and crop protection…At the same time, we are significantly enhancing our Nutrition & Health capabilities, a key area of growth and opportunity for the intended independent Specialty Products company.”
Breen termed the agreement a “win-win” for both DuPont and FMC, saying that it is “pro-competitive” and moves along the regulatory approval process in the merger deal with Dow. The eventual goal of the merger is to create three independent companies that specialize in different industries, with one of those being agriculture.
“This is a significant step forward for FMC, and for our Agricultural Solutions business in particular,” said Pierre Brondeau, FMC president, CEO and chairman. “The combination of market-leading products from DuPont’s crop protection portfolio and its world-class R&D capabilities will transform our Agricultural Solutions business into a tier-one ag technology company…
“By combining these high-value products and R&D capabilities with our own product portfolio, pipeline and formulation expertise, FMC will be able to serve our customers better and accelerate the pace at which we bring new solutions to the market,” Brondeau added. “The concurrent sale of our Health and Nutrition business will allow us to maintain our strong balance sheet and ensure we can continue to invest in growing both our Agricultural Solutions and Lithium segments.”
<h2>DuPont – What It’s Spinning Off</h2>
Under the terms of the agreement, FMC will acquire DuPont’s Cereal Broadleaf Herbicides and Chewing Insecticides portfolios – including Rynaxypyr, Cyazypyr and Indoxacarb. Also, FMC will acquire the DuPont Crop Protection research and development pipeline and organization, excluding seed treatment, nematicides, and late-stage R&D programs, which DuPont will continue to develop and bring to market. The assets being divested generated revenues in 2016 of about $1.4 billion.
Following the divestiture, the Agriculture division of the merged company will retain a portfolio of products in corn and soy broadleaf and grass control, a cereal weed control portfolio, DuPont’s position in disease control, and Dow AgroSciences’ insecticide portfolio. Acquisition of FMC Health & Nutrition Business
As noted above, DuPont will acquire FMC’s Health & Nutrition business, which generated more than $700 million in revenues in 2016, which includes food ingredient products.
The transaction with FMC is expected to close in the fourth quarter of 2017, subject to the closing of the DuPont and Dow merger, in addition to other customary closing conditions, including regulatory approvals.
To accommodate the requirements of the FMC transaction, DuPont and Dow have amended the merger agreement to extend the “Outside Date” to August 31, 2017, and the companies anticipate closing of the merger to occur between August 1, 2017 and September 1, 2017, subject to satisfaction of customary closing conditions, including receipt of regulatory approvals.
The companies still expect the intended spin-offs to occur within 18 months after closing. In addition, Dow and DuPont are announcing that they now expect the first spin-off of the intended separation process will be the spin-off of the post-merger Material Science company.