Nufarm to acquire FMC cereal herbicides in Europe
Nufarm has agreed to acquire certain cereal herbicides from FMC for $85 million plus inventory valued at some $5 million.
Nufarm has agreed to acquire certain cereal herbicides from FMC for $85 million plus inventory valued at some $5 million. FMC is divesting the portfolio to meet European Commission requirements relating to its acquisition of crop protection assets from DuPont (part of DowDuPont). The Commission approved that deal on condition that FMC divest its sulfonylurea and florasulam herbicide businesses in the European Economic Area (the EU plus Iceland, Liechtenstein and Norway).
The portfolio comprises eight formulations based on four active ingredients primarily for broadleaf weed control in cereals. No physical assets (apart from inventory) or personnel will be transferred to Nufarm under the transaction. FMC has granted Nufarm a non-complete undertaking and non-exclusive rights to non-cereal uses of the herbicides. The companies have also agreed terms on transitional supply arrangements. Completion of the acquisition is subject to European regulatory approval, which is expected to be received within the next few months.
In the first full year of Nufarm ownership, the portfolio is expected to generate net sales of some Aus$30 million (US$23.5 million at the current rate) and contribute earnings before interest, tax, depreciation and amortisation of about Aus$15 million (US$11.7 million). The portfolio has an attractive near-term growth profile supported by a number of formulations that were recently launched as well as cross-selling opportunities for existing products and the acquired range, Nufarm points out. The two largest markets for the FMC products are France and Germany, which are two of Nufarm’s key European strategic hubs.
The products are “highly complementary” to Nufarm’s existing portfolio as well as the products being acquired from ChemChina businesses Adama and Syngenta, according to Nufarm’s managing director and CEO, Greg Hunt. “The addition of these important herbicides further strengthens Nufarm’s position in cereal crops, which is Europe’s largest crop segment,” Mr Hunt says. “These herbicide products from FMC are highly complementary to Nufarm’s core phenoxy herbicide franchise with combinations of the two chemistry groups being widely used by growers to manage resistance issues.”