Speciality chemicals firm FMC Corporation will be buying parts of US chemical company DuPont’s crop protection business which the European Commission has ruled must be divested for DuPont’s US$130bn merger with Dow Chemical Company to take place, both companies said on 31 March.
FMC would acquire DuPont’s cereal broadleaf herbicide and chewing pest insecticide portfolios, its crop protection R&D pipeline and organisation, excluding seed treatment, nematicides and late-stage R&D programmes.
In addition, DuPont would purchase FMC’s health and nutrition business for US$1.2bn.
FMC said once the deal was completed, its agricultural solutions business would become the world’s fifth largest crop protection chemical company by revenue, with an estimated annual revenue of US$3.8bn.
DuPont said the assets it was divesting generated revenues of about $US1.4bn in 2016. FMC was expecting its acquisition to generate US$1.5bn in revenue and US$475M in EBITDA in 2017.
“This agreement with FMC is a win-win. It’s pro-competitive, it advances the regulatory approval process, and it maintains the strategic logic and value creation potential of our merger with Dow and the three independent companies we intend to create,” said DuPont chairman and CEO Edward D. Breen.
The FMC nutrition and health business to be acquired by DuPont generated more than US$700M in revenues in 2016 from two main segments, namely texturants as food ingredients and pharmaceutical excipients, DuPont’s statement read.
Pierre Brondeau, president, CEO and chairman at FMC, described the agreement as a “significant step forward” for FMC.
“The crop protection industry is undergoing significant change, as evidenced by the consolidation currently underway,” he said.
“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,” added Brondeau.
He concluded by saying that the sale of FMC’s health and nutrition business would allow it to maintain a “strong balance sheet” and continue investing in its agricultural solutions and lithium segments.
FMC also said in a statement that the agreement would result in a “significant” increase in FMC’s crop protection presence in Asia and Europe.
The transaction between DuPont and FMC was expected to close in fourth quarter 2017, subject to the closing of the DuPont and Dow merger.