FMC acquire portion DuPont's crop protection biz

FMC to acquire portion of DuPont's crop protection biz

7:47 AM, 3rd April 2017
FMC to acquire portion of DuPont's crop protection biz
With this acquisition, FMC agricultural solutions will become the fifth largest crop protection chemical company in the world by revenue.

PHILADELPHIAUS: FMC Corporation (FMC) has signed a definitive agreement to acquire the portion of DuPont's crop protection business required to be divested by a European Commission ruling related to DuPont's merger with The Dow Chemical Company.   

Furthermore, DuPont will acquire FMC health and nutrition and receive $1.2 billion in cash. FMC will acquire DuPont's global chewing pest insecticide portfolio, its global cereal broadleaf herbicides, and a substantial portion of DuPont's global crop protection R&D capabilities.  

In 2017, FMC expects this acquired business will generate approximately $1.5 billion in revenue and $475 million of EBITDA.

After closing of the acquisition, FMC agricultural solutions will become the fifth largest crop protection chemical company in the world by revenue, with estimated annual revenue of approximately $3.8 billion

"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,” said Pierre Brondeau, FMC president, CEO and chairman.

The crop protection business being acquired

The acquired portion of DuPont's crop protection business includes an industry-leading selective insecticide portfolio consisting of Rynaxypyr, Cyazypyr and Indoxacarb.  The first two of these products have full patent protection over their respective active ingredients, and FMC expects these products will generate over $1 billion in 2017 revenue. These selective insecticides are highly complementary to FMC's existing broad spectrum insecticide portfolio. 

The acquired portfolio also includes DuPont's global cereal broadleaf herbicides, consisting of nine active ingredients and multiple formulated products. This herbicide portfolio comes with strong, recognised brands and DuPont's proprietary PrecisionPac technology. These products bring significant diversification to FMC's crop exposure in herbicides, as well as increasing the balance of pre-emergent and post-emergent applications in FMC's portfolio.

The geographic spread of the revenue in this portfolio will result in a significant increase in FMC's presence in Asia and Europe. Following the acquisition, FMC's crop protection revenue will be almost equally spread across all four major regions – North America, Latin America, Europe and Asia.

The underlying intellectual property related to the acquired products, including patents, registrations and data packages, will be transferred to FMC. FMC will acquire a global manufacturing network to fully support these products, including four active ingredient manufacturing facilities and 10 regional formulation plants.

The acquisition will bring DuPont's world-class discovery and development organisation, including its Delaware crop protection research headquarters, 14 regional development labs and related regulatory capabilities. 

This organisation includes a pipeline of 15 synthetic active ingredients currently in development, covering insecticides, herbicides and fungicides, and an extensive library of 1.8 million synthetic compounds. The majority of DuPont's crop protection research workforce will transfer to FMC as part of this transaction.

FMC health and nutrition divestiture

FMC health and nutrition will become part of DuPont's nutrition & health segment. 

"FMC health and nutrition is a highly profitable business with leading positions across the vast majority of its portfolio, deep applications knowledge and an extensive global network of laboratories and manufacturing facilities.  It is a very complementary fit with DuPont's current portfolio.  We are confident it will thrive under DuPont's leadership and will contribute to their successful nutrition & health business," added Brondeau.

The closing of the transaction is expected to occur in the fourth quarter of 2017. FMC expects this transaction to be immediately accretive to adjusted earnings per share.

Dyal Co LLC and Citi acted as financial advisors and Wachtell, Lipton, Rosen & Katz acted as legal counsel to FMC. Citi provided financing advice and committed debt facilities.

© Worldofchemicals News 

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