As JANA Partners took a new position in FMC Corp (NYSE:FMC), the question becomes: what are they after?

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jana Barry Rosenstein FMC

JANA added FMC in its portfolio

In the second quarter Barry Rosenstein’s JANA Partners took positions in FMC and Charter Communications while shedding exposure in Sirius XM Holdings Inc. (NASDAQ:SIRI), Juniper Networks, Inc. (NYSE:JNPR), and Golar LNG Limited (NASDAQ:GLNG).

Barry Rosenstein’s JANA Partners’ 13F filing, as reported in ValueWalk, revealed a brand new position in FMC Corp (NYSE:FMC) that amounts to for 2.83% of JANA’s 2Q14 portfolio.  Other investors in the stock include the activist hedge fund Third Point, led by Dan Loeb, who loaded up his shopping cart to purchase $110 million of the stock as of June 30.

The question is why?

As noted in a Yahoo Finance report, FMC Corp (NYSE:FMC) is a diversified chemical company with three distinct business segments in Agricultural Solutions, Health and Nutrition and Minerals.  The health and nutrition segment accounted for 20 percent of 2013 revenues while the minerals segment represents 25 percent of sales, with the agricultural segment accounting for a whopping 55 percent.

Typically a company structured in this fashion would be a prime target for a break up, spinning off assets.  It is not uncommon for Rosenstein to purchase stock and then demand the company be torn apart.

However, it looks like this is already being done.

FMC’s planned spin-off

This past March, FMC revealed it plans to spin its assets into two independent public companies.  The “New FMC” will consist of FMC’s Agricultural Solutions and Health and Nutrition segments while the second company, “FMC Minerals,” will consist of FMC Corp (NYSE:FMC)’s current Minerals segment.

FMC claims that this is all part of its grand vision, and the goal of two separate companies is a natural progression of its strategy.  Once the plan is approved, the separation is expected to take the form of a tax-free distribution of shares to existing FMC shareholders. FMC expects to complete the separation in early 2015 and list the company on the New York Stock Exchange.

Rosenstein and Loeb must see something in the company, the question is what?  Could it be that they expect additional value to be unlocked when the break up occurs?  The stock clearly isn’t a momentum play. After a strong run-up in price, FMC Corp (NYSE:FMC) stock has recently entered into a downtrend.  Indications are if anything the stock could run into algorithmic selling if it continues with its downside momentum. So what do these activists see? Stay tuned.