MERGERS & ACQUISITIONS
Two big agchem mergers advance Divestments and an asset swap help DuPont, ChemChina clear regulatory hurdles
as well as excipients used in drugs. DuPont has its own nutrition and health business that sells products such as probiotics and the food texturant pectin. According to DuPont, the deal with FMC will happen after it completes its merger with Dow, which is now expected to occur between Aug. 1 and Sept. 1 of this year. Dow and DuPont say they remain committed to then splitting the combined firm
Two of the three megamergers occurring In a conference call with analysts, Bronin the agrochemicals industry are taking deau said the deal will yield $65 million in major steps toward completion. DuPont synergies from cost reductions and addihas struck a deal that satisfies European tional revenues in 2018. But he stressed demands concerning its merger with Dow that none of the cost reductions will come Chemical, and ChemChina has started from the R&D operation. divesting assets to satisfy regulators assessThe swap will help cement FMC’s coming its acquisition of Syngenta. To win EU approval for its merger with Dow, DuPont will sell a large portion of its crop protection business to FMC. In return, DuPont will receive $1.6 billion and FMC’s health and nutrition business. The Dow-DuPont merger has not yet been approved by U.S. antitrust regulators. The asset swap will make FMC the fifth-largest crop protection chemical company in the world, with estimated annual sales of $3.8 billion. In the deal, FMC will get DuPont’s insecticides that control chewing and sucking insects on fruits and vegetables, including Rynaxypyr and Cyazypyr, which together are expected to generate $1 billion in sales in 2017. FMC will DuPont’s Prevathon, powered by the blockbuster insecticide Rynaxypyr, kills worms also get DuPont’s broadleaf herbicide portthat attack cotton plants. folio for cereal crops. Of longer-term importance, the deal petitive position in agriculture, said Lauinto three independent companies—matransfers to FMC most of DuPont’s agrirence Alexander, chemical analyst at the terials science, agriculture, and specialty culture R&D footprint. The research orinvestment bank Jefferies. In a note to inproducts—within 18 months. The two ganization is made up of a crop protection vestors, Alexander pointed out FMC could firms say the materials science business headquarters in Delaware, 14 regional labs, have lost out if BASF had acquired the will emerge first. a research workforce, and regulatory staff. assets. FMC’s share price jumped by close Meanwhile, ChemChina received conFMC also gets DuPont’s to $10.00, hitting $71.20 ditional approval from the EU and the U.S. development pipeline of 14 shortly after the deal was an- Federal Trade Commission to complete its active ingredients. nounced on March 31. acquisition of the Swiss agrochemical firm The price jump for FMC Overall, the DuPont In addition to its Syngenta. Regulators are requiring Chemstock shows investors’ crop protection businessnow-larger agriculture China’s Adama generic pesticides subsidenthusiasm for the firm’s es being sold represented segment, FMC operates iary to sell certain overlapping businesses acquisition of a large roughly $1.4 billion in sales a lithium business, which because they compete with Syngenta in the portion of DuPont’s and $450 million in earnit came close to selling in U.S. and EU. pesticide business. ings in 2016. FMC says the 2014. Brondeau said FMC is In the U.S., Adama will sell American products complement its now investing in its lithium Vanguard its versions of the herbicide paraFMC CLOSING broad-spectrum insecticide capacity and will spin off quat, the insecticide abamectin, and the DATE PRICE and pre- and post-emergent the business sometime after fungicide chlorothalonil. In the EU, it will March 23 $61.55 herbicide portfolios. 2018. have to find buyers for a “significant part” March 24 61.15 “By combining these Although DuPont was of its existing pesticide business. In addiMarch 27 61.45 high-value products and expected to sell the agrition, ChemChina will have to sell some of March 28 61.81 R&D capabilities with our culture portfolio, an unexSyngenta’s pesticides, 29 generic pesticides March 29 61.38 own product portfolio, pected part of the deal is under development, seed treatments, and a March 30 61.50 pipeline, and formulation FMC’s agreement to sell its plant growth regulator business. March 31 69.59 expertise, FMC will be able $700 million-per-year food A third megamerger in the agriculture inApril 3 70.38 to serve our customers betand pharmaceutical ingredustry—Bayer’s acquisition of Monsanto— ter and accelerate the pace dients business to DuPont. has yet to receive approvals from U.S. or April 4 71.38 at which we bring new soluFMC produces texturing European regulators. Jefferies’s Alexander April 5 72.05 tions to the market,” said agents, such as the biopolystill expects it to close in 2017.—MELODY CEO Pierre Brondeau. Source: Yahoo Finance mers carrageenan and algin, BOMGARDNER
CREDIT: DUPONT
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APRIL 10, 2017 | CEN.ACS.ORG | C&EN
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