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DuPont (DD) & FMC Corp Asset Deal Gets U.S. Antitrust Approval

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DuPont (DD - Free Report) announced that the waiting periods for the approval of its transactions with FMC Corporation (FMC - Free Report) under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 have expired on Jun 9 without a request for additional information and documentary material by the U.S. Department of Justice.

The expiration satisfies certain conditions of closing related to the proposed transaction between DuPont and FMC Corp. On Mar 31, DuPont announced that it entered into a definitive agreement with FMC Corp to divest its Crop Protection business (along with R&D capabilities) and also to acquire FMC Corp’s Health & Nutrition business. The transaction includes consideration of $1.6 billion payable to DuPont, reflecting difference in value of assets. The amount includes working capital of $425 million and cash of $1.2 billion.

The divestiture also satisfies conditional regulatory clearance required for the merger between DuPont and The Dow Chemical Company (DOW - Free Report) . DuPont expects the FMC Corp deal to close in the fourth quarter of 2017, subject to regulatory approvals and other customary closing conditions, including the closing of the DuPont and Dow merger.

The proposed mega-merger with Dow is expected to deliver cost synergies of around $3 billion. The companies also recently secured conditional regulatory approval in China and Brazil for the planned merger.

DuPont is focused on an aggressive cost-cutting strategy. Further, DuPont remains committed to introduce new higher-performing products to meet farmers’ needs. It has numerous new products in its pipeline that should contribute to top line growth.

However, DuPont is exposed to raw material cost pressure and currency headwinds, which can impact its results. The company also faces certain challenges in its nutrition & health and electronics businesses.

DuPont’s shares have moved up around 2.8% over the past three months, underperforming the Zacks categorized Chemical-Diversified industry’s 3.8% gain.

 


 

DuPont currently carries a Zacks Rank #3 (Hold).

Stocks to Consider

A stock worth considering in the Chemical-Diversified industry is Huntsman Corp. (HUN - Free Report) . Huntsman has expected long-term earnings growth rate of 7% and sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks Rank #1 stocks here.

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