Mar 31, 2017

FMC acquires portion of DuPont’s Crop Protection business

FMC Corporation and DuPont have signed a definitive agreement for FMC to acquire the portion of DuPont’s Crop Protection business it must divest to comply with the European Commission ruling related to its merger with The Dow Chemical Company. Additionally, 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 acquired portion of DuPont’s crop protection business includes a 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.

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, recognized brands and DuPont’s proprietary PrecisionPac technology.

The geographic spread of the revenue in this portfolio will result in a significant increase in FMC’s presence in Asia and Europe, according to the company. 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 includes DuPont’s Delaware crop protection research headquarters, 14 regional development labs and related regulatory capabilities. This organization includes a pipeline of 15 synthetic active ingredients currently in development, covering insecticides, herbicides and fungicides, and a 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 will become part of DuPont’s Nutrition & Health segment.

The transaction is subject to the closing of the Dow and DuPont merger, as well as customary closing conditions and regulatory approvals. Closing is expected to occur in the fourth quarter of 2017. FMC expects this transaction to be immediately accretive to adjusted earnings per share, and will give updated guidance for 2017 at its earnings call scheduled for May 2.

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.