DuPont in asset swap deal with FMC Corp as part of EU regulatory requirement

US chemical giant DuPont today said that it would sell a part of its crop protection business to FMC Corp and buy nearly all of FMC's health and nutrition unit in a deal that will give DuPont $1.6 billion.

The transaction will give DuPont of $1.6 billion to reflect the difference in the value of the assets, including cash of $1.2 billion and working capital of $425 million.

The divesture is part of DuPont's commitments to the European regulator over the conditional approval of the $130-billion DuPont-Dow Chemical merger. (See: European regulator approves $130-bn Dow Chemical-DuPont merger with conditions)

Under the terms of the agreement, FMC will acquire DuPont's Cereal Broadleaf Herbicides and Chewing Insecticides portfolios – including Rynaxypyr, Cyazypyr and Indoxacarb.

In addition, FMC will acquire the DuPont Crop Protection research and development pipeline and organization, excluding seed treatment, nematicides, and late-stage R&D programs, which DuPont will continue to develop and bring to market, and excluding personnel needed to support marketed products and R&D programs that will remain with DuPont.

The assets being divested generated revenues in 2016 of about $1.4 billion.

As part of the asset swap deal, DuPont will acquire FMC's Health & Nutrition business, which generated more than $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.

The transaction with FMC is expected to close in the fourth quarter of 2017, subject to the closing of the DuPont-Dow merger.