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DuPont announces agreement with FMC


2017-04-08

DuPont has announced that it has entered into a definitive agreement with FMC Corporation 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 & 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. The divestiture will satisfy DuPont's commitments to the European Commission in connection with its conditional regulatory clearance of the merger with Dow.

"We believe this agreement is an excellent outcome that serves the best interests of all stakeholders, including our shareholders, customers and employees," said Edward D. 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 & 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," concluded Breen.

The merger transaction is still expected to generate cost synergies of approximately US$3 billion and growth synergies of US$1 billion.

As part of the transaction agreement, DuPont will acquire FMC's Health & Nutrition business, which generated more than US$700 million in revenues in 2016 from two main segments: texturants as food ingredients and pharmaceutical excipients. The business is highly complementary to DuPont's existing Nutrition & Health (N&H) business with opportunity for growth synergies. By integrating FMC's complementary Health & Nutrition business, DuPont will strengthen its N&H capabilities with broader offerings and an expanded footprint.

DuPont's N&H business is a leader in the food ingredients industry, using renewably sourced raw materials to create a wide range of ingredients that food manufacturers use to provide safer, healthier, more affordable and nutritious food and beverages for consumers.  This transaction strengthens DuPont's access to key ingredients for its systems and food texturants portfolio, enables the business to expand into the fast-growing pharma excipients space, and provides access to new and complementary routes to market. As a result, DuPont N&H will be in a stronger position to drive growth, invest in R&D, and provide more products and solutions to customers worldwide.

The transaction with FMC is expected to close in the fourth quarter of 2017, subject to the closing of the DuPont and Dow merger, in addition to other customary closing conditions, including regulatory approvals, the company reported.

To accommodate the requirements of the FMC transaction, DuPont and Dow have amended the merger agreement to extend the "Outside Date" to August 31, 2017, and the companies anticipate closing of the merger to occur between August 1, 2017 and September 1, 2017, subject to satisfaction of customary closing conditions, including receipt of regulatory approvals. The companies still expect the intended spin-offs to occur within 18 months after closing. In addition, Dow and DuPont are announcing that they now expect the first spin-off of the intended separation process will be the spin-off of the post-merger Material Science company.

Evercore and Goldman, Sachs & Co. are serving as DuPont's financial advisors for the transaction, with Skadden, Arps, Slate, Meagher & Flom LLP acting as its legal advisor, said DuPont.