FMC to Acquire Cheminova for $1.8 Billion
8 September 2014 
“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.” –FMC CEO Pierre Brondeau
FMC Corp. on Monday said it will acquire Danish crop protection company Cheminova A/S, a subsidiary of Auriga Industries A/S, for $1.8 billion.
“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,” said Pierre Brondeau, FMC president, chairman and CEO.
“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,” he said.
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.
Jens Due Olsen, Auriga and Cheminova chairman, said, “In FMC, we have found a great new owner and the perfect industrial match. As a successful and highly recognized company, FMC appreciates our manufacturing and formulation capabilities, our strong research, development and registration base, and global organization. FMC brings the scale and financial strength necessary to develop a true world leader within crop protection.”
FMC intends to continue to operate, post-closing, all of the manufacturing facilities currently operated by Cheminova. This includes the active ingredient manufacturing facilities in Denmark and India and the formulation facilities located in Denmark, India, Germany, Australia, Italy and the UK.
FMC, which invests more than $150 million a year on crop protection R&D, said the acquisition is expected to close in early 2015 and is subject to customary closing conditions and regulatory approvals. It will be financed with committed debt facilities. FMC anticipates achieving synergies through a combination of production and operating efficiency gains, as well as improved market access. FMC expects the transaction to be accretive to adjusted earnings in the first full year following completion of the acquisition.
Goldman Sachs acted as financial advisor and Wachtell, Lipton, Rosen & Katz acted as legal counsel to FMC in connection with the acquisition. Citigroup provided additional financial advice and committed debt facilities.
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