DuPont in deal with FMC to aid Dow merger plan
DUPONT has entered into an agreement with FMC Corp 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 and nutrition business.
The transaction includes consideration to DuPont of US$1.6 billion to reflect the difference in the value of the assets, including cash of US$1.2 billion and working capital of US$425 million, DuPont said on Monday.
The divestiture will satisfy DuPont’s commitments to the European Commission in connection with its conditional regulatory clearance of the merger with Dow Chemical.
“We believe this agreement is an excellent outcome that serves the best interests of all stakeholders, including our shareholders, customers and employees,” said Edward 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, which will include greatly expanded offerings and a robust pipeline across seed germplasm, biotech traits, and crop protection to provide greater choice and innovation to growers around the world.
“At the same time, we are significantly enhancing our nutrition and health capabilities, a key area of growth and opportunity for the intended independent Specialty Products company.
“This agreement with FMC is a win-win. It is 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.”
The merger transaction is still expected to generate cost synergies of approximately US$3 billion and growth synergies of US$1 billion.
