FMC Corporation announced that it has signed a definitive agreement to acquire Cheminova A/S, a wholly owned subsidiary of Auriga Industries A/S. Cheminova is a multinational crop protection company based in Denmark. FMC will fund the all-cash acquisition through a mixture of debt and existing cash reserves. The transaction is expected to close in early 2015 and will be accretive to adjusted earnings in the first full year following the acquisition.
"We are very excited about the opportunity to combine Cheminova with our own Agricultural Solutions business," said Pierre Brondeau, FMC Corporation president, CEO and chairman. "Cheminova is a company that we have long considered to be an attractive potential partner. It follows a similar strategic approach to FMC in applying technology to deliver solutions to its customers, and has a highly complementary product portfolio and geographic footprint. This transaction will broaden our Agricultural Solutions portfolio and significantly strengthen our market access in key agricultural end markets.
"Cheminova's direct market access in Europe, combined with its strong position in Latin America, will help bring greater balance to our business. Its technology will allow us to expand our position in existing crop segments and provide accelerated access to additional crops, such as cereals. It will also strengthen our offerings to existing customers, especially in sugarcane, soybeans and cotton."
Brondeau added that Cheminova brings complementary technologies in insecticides and herbicides, significantly enhances FMC's fungicide portfolio and adds a growing micronutrient business. "Cheminova has a portfolio of more than 60 active ingredients, over 2,300 registrations and a pipeline of active ingredients currently under development. It is the addition of this broad suite of technology that is particularly exciting to us, and we firmly expect to increase our pace of new product launches in the coming seasons as a direct result of adding Cheminova's capabilities to ours," said Brondeau.
FMC will modify its previously announced separation plans by pursuing a sale of Alkali Chemicals. Commenting on this decision, Brondeau said, "FMC is committed to its strong balance sheet and a sale of Alkali Chemicals will allow us to de-lever to a point that is appropriate for our business profile. Alkali Chemicals is a well-run, highly profitable and cash generative business, and we are confident it will attract many interested buyers. We expect to complete this sale by mid-2015."
FMC Lithium will be retained as a separate operating segment.