Chemical company FMC Corporation is to acquire Cheminova A/S, a multinational crop protection specialist based in Denmark, Reuters reported.
Cheminova will be combined with FMC's existing Agricultural Solutions business. According to Pierre Brondeau, FMC's president, CEO and chairman, the two operations have complementary product portfolios and geographic reach. This acquisition will broaden the company's offering and strengthen its market access in key agricultural end markets.
"Cheminova's direct market access in Europe, combined with its strong position in Latin America, will help bring greater balance to our business," Brondeau said. "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."
FMC will pay $1.8 billion to buy the business from its parent company Auriga Industries A/S, funding the all-cash acquisition through a mixture of debt and existing cash reserves. Auriga announced in July that it was considering a sale of the business.
As a result of this acquisition, FMC will modify its previously announced separation plans by pursuing a sale of Alkali Chemicals and will use the proceeds to reduce acquisition-related debt. FMC Lithium will be retained as a separate operating segment, the company said.
FMC expects the addition of Cheminova to be accretive to its adjusted earnings in the first full year.
The acquisition is scheduled to be completed in early 2015.
