FMC To Acquire Auriga's Cheminova Unit For $1.8 Bln - Update

(RTTNews) - Diversified chemicals maker FMC Corp. (FMC) Monday said it has signed a definitive agreement to acquire Denmark-based crop protection products company Cheminova A/S for $1.8 billion. Cheminova is a unit of Auriga Industries A/S.

FMC expects the transaction to be accretive to adjusted earnings in the first full year following the closing. The deal is expected to close in early 2015.

FMC will combine Cheminova with its Agricultural Solutions business, and sees that the transaction will broaden its Agricultural Solutions portfolio and significantly strengthen its market access in key agricultural end markets.

Pierre Brondeau, president, CEO and chairman of FMC stated, "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..."

FMC noted that Cheminova's technology will allow it to expand its position in existing crop segments and provide accelerated access to additional crops, such as cereals.

In addition, Cheminova has complementary technologies in insecticides and herbicides, which will enhance FMC's fungicide portfolio and will benefit its micronutrient business, the firm said.

FMC said it would fund the all-cash transaction through a mixture of debt and existing cash reserves.

Further, FMC stated that it will modify its previously announced separation plans by pursuing a sale of Alkali Chemicals, which is expected to complete by the middle of 2015. FMC Lithium will be retained as a separate operating segment.

In March this year, FMC had announced its plans to split the company into two independent publicly listed companies, New FMC and FMC Minerals.

New FMC was expected to comprise of its agricultural solutions as well as health and nutrition segments, while FMC Minerals to include its current minerals segment, comprising the Alkali Chemicals and Lithium businesses.

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. FMC closed Friday's regular trading at $65.60 on the NYSE.