FMC Corp. is a diversified chemical company that offers innovative solutions, applications and market-leading products to agricultural, consumer and industrial manufacturers worldwide. The company announced that it plans to create two independent public companies by spinning off its agriculture and health-care and nutrition units.
The agricultural unit of FMC Corp. was reported to have contributed the most in 2013, with 2.15 billion dollars in revenue. On the other hand, 762 million dollars were provided by FMCs health-care and nutrition segments. The combined revenue for the operations is expected by the company to increase by 16% in 2014. The alkali chemicals and lithium segments are included in the minerals business of the company, which generated 970 million dollars in revenue last year. The segment is expected to experience a 7% increase in revenue by the end of the current year.
FMC Corp. made an official statement today, explaining that the transaction will be in the form of a tax-free distribution of shares, which will be provided to already existing shareholders. The separation is expected to be finalized by the company in early 2015. Both units are expected to be publicly traded on the New York Stock Exchange after the spin-off takes place.
Such a move will help the company create the so-called New FMC that is intended to include the agricultural and health-care and nutrition businesses. The New FMC will be put under the lead of Mr. Brondeau as a Chief Executive Officer and Mr. Paul Graves, who is the companys Chief Financial Officer.
Mr. Pierre Brondeau, who is the current Chairman and Chief Executive Officer of the company, said in the statement, which was cited by Bloomberg: “Creating two companies, each with its own publicly listed equity, will enable the management of each company to pursue its own strategy.” As reported by the Wall Street Journal, he added: “This will give each company greater focus on the success factors that are most important to its business and allow the adoption of a capital structure that is appropriate to its business profile.”
FMC Corp. surged by 6.69% in New York by 13:56 GMT, marking a one-year change of +35.91%. The company is valued at $10.35 billion. According to CNN Money, the 10 analysts offering 12-month price forecasts for FMC Corp. have a median target of $80.50, with a high estimate of $87.00 and a low estimate of $62.00. The median estimate represents a +3.38% increase from the previous close of $77.87.
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