Diversified chemicals maker FMC Corp. (FMC) has agreed to acquire Cheminova A/S, an unit of Auriga Industries A/S. Denmark-based Cheminova is a multinational crop protection company. FMC would fund the all-cash transaction via. a mixture of debt and existing cash reserves. The transaction may close in early 2015 and would be accretive to adjusted earnings in the first full year following the acquisition.
Commenting on combining Cheminova with its own Agricultural Solutions unit, FMC Corp.'s President & Chief Executive, Pierre Brondeau, noted: "This transaction will broaden our Agricultural Solutions portfolio and significantly strengthen our market access in key agricultural end markets." He continued, "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 over 60 active ingredients, over 2,300 registrations and a pipeline of active ingredients currently under development.
FMC would modify its prior announced separation plans by pursuing a sale of Alkali Chemicals. Commenting on this, 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." Meanwhile, FMC Lithium would be retained as a separate operating division.
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