FMC announced early Friday morning that it would be acquiring DuPont’s cereal herbicides business, as ordered by the European Commission to allow the merger of DuPont and Dow.
While that deal will now not close until sometime in August, it helps pave the way for the big merger. FMC said it expects its deal with DuPont to be finalized by the fourth quarter of this year.
In Western Canada FMC will gain a significant market-share opportunity with cereals products including the custom blending and packaging Precisionpac – the big refrigerator-shaped distribution tool found at the retail dealerships.
DuPont also provided cereals broadleaf weed control with popular products, including Refine, Triton, Barricade and Harmony making it a big part of Prairies agriculture. These will round out FMC’s portfolio of products in the region, said the company.
FMC will also get DuPont’s chewing insect portfolio of pesticides and pay DuPont about US$1.2 billion in cash, along with handing over its nutrition and health portfolio to the soon to be merged DowDuPont.
This will put FMC in fifth place globally, by revenue, as crop protection companies goes.
In 2017, FMC expects the herbicide portion of the acquired business will generate about US$1.5 billion in revenue and US$475 million of EBITDA, now with total projected revenues of about US$3.8 billion.
Pierre Brondeau, FMC president spoke to the acquisition this morning, saying, “This is a significant step forward for FMC and for our agricultural solutions business in particular. The combination of market-leading products from DuPont’s crop protection portfolio and its world-class (research and development) capabilities will transform our Agricultural Solutions business into a tier-one ag technology company.”
He said the industry was “Undergoing significant change, as evidenced by the consolidation currently underway. To continue to meet the demands of our customers, FMC needs to provide more options to growers looking for innovative solutions that protect crops and increase yields.”
FMC will also get the staff, labs and research related to the newly obtained products, including the pipeline of herbicides already in development.
The insecticide part of the deal includes rynaxypyr the insecticide in Coragen, used on cereals, canola and sunflowers. Cyazypyr is included in the deal, with the trade name Exirel and is used in fruit and vegetables. These two still have patent protection of their active ingredients, and FMC said it expects the products will generate more than US$1 billion in 2017 revenue, along with one other used in berry and tree fruit market, but not registered in Canada.
Brussels cleared the giant US$145 billion merger of Dow and DuPont this past Monday, provided that the companies agreed to sell substantial parts of their business to meet he European Commission’s concerns about a lack of competition in the marketplace. The merger is awaiting approval in other markets, including Canada and the U.S.