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FMC Closes Acquisition of Part of DuPont's Crop Protection Business.


2 November 2017 - US-based chemical companies FMC Corp. (NYSE: FMC) and DuPont (NYSE: DD) have closed an agreement for FMC to acquire the portion of DuPont's Crop Protection business it had to divest to comply with the European Commission ruling related to its merger with The Dow Chemical Co, FMC said.

Additionally, DuPont acquired FMC Health and Nutrition and receive USD 1.2bn in cash.

This transaction was announced in April.

DuPont's Crop Protection business had to divest to comply with the European Commission ruling related to its merger with The Dow Chemical Co, which was completed on 31 August 2017, to form DowDuPont.

FMC acquired 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 USD 1.5bn in revenue and USD 475m 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 USD 3.8bn.

The acquired portion of DuPont's crop protection business includes a selective insecticide portfolio consisting of Rynaxypyr, Cyazypyr and Indoxacarb.

FMC said the first two of these products have full patent protection over their respective active ingredients, and FMC expects these products will generate over USD 1bn 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, recognized brands and DuPont's proprietary PrecisionPactechnology.

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 ten regional formulation plants.

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 4Q17.

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 2 May 2017.

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

Country: USA

Sector: Chemicals

Target: Portion of DuPont's crop protection business including the insecticides Rynaxypyr, Cyazypyr and Indoxacarb

Buyer: FMC


Deal size in USD: 1.2bn

Type: Corporate Acquisition

Financing: Cash

Status: Closed

Buyer advisor: , ,

Comment: Simultaneously, Dupong will FMC Health and Nutrition
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Publication:M & A Navigator
Date:Nov 2, 2017
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