FMC to acquire Danish fungicide-ingredient maker Chemivova for $1.8 bn
08 Sep 2014
FMC Corp is acquiring Danish fungicide-ingredient maker Cheminova for $1.8 billion as FMC's chief executive officer Pierre Brondeau is building up the company's agrochemicals division ahead of a planned break up, Bloomberg reported.
The acquisition, set for completion in 2015, will be financed through a mixture of debt and existing cash, Philadelphia-based FMC said in a statement today. It would add to adjusted earnings in the first full year of ownership.
According to FMC, it now intended to sell its alkali chemicals division to contain debt as it modifies Brondeau's earlier plan for combining Cheminova assets with mineral operations, which would be split into a separate listed company.
Brondeau intends to focus the company on fungicides and insecticides as also food ingredients including Omega 3 fatty acids, where demand has an element of stability against economic swings that could impact commodities.
''Cheminova is a company that we have long considered to be an attractive potential partner,'' Brondeau said in the statement.
The Danish company would expand its customer base in Europe and broadbase its offerings in crops to include cereals.
eanwhile, Auriga Industries A/S, Cheminova's parent said in a press release, "Today, Auriga Industries A/S has signed an agreement to sell its wholly owned subsidiary Cheminova A/S to FMC Corporation for a total of approx DKK 10.5 billion on a net debt free basis, corresponding to a cash consideration of approx DKK 8.5 billion adjusted for net debt. The transaction is subject to approval by Auriga's shareholders at an Extraordinary General Meeting as well as approval from relevant competition authorities.
The transaction is expected to close in early 2015, followed by distribution of cash proceeds to shareholders in 2015.
Cheminova, headquartered in Harboøre, Denmark, is a global, sustainable and innovative supplier of quality products for crop protection. Founded in 1938, Cheminova is a commercial company with a diversified product portfolio and sales in more than 100 countries. Cheminova employs more than 2,200 employees globally.
Jens Due Olsen, chairman of the board of directors of Auriga as well as Cheminova 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 organisation. FMC brings the scale and financial strength necessary to develop a true world leader within crop protection. I am proud of our employees for creating a strong international company which can now show its full potential.''
