DuPont (NYSE: DD) has agreed to exchange its crop protection business for the health and nutrition business of fellow chemical manufacturer FMC (NYSE: FMC) in order to expedite DuPont’s agreed-upon $72 billion merger with Dow (NYSE: DOW). The asset swap will also include a $1.2 billion cash payment to DuPont and result in a third delay to the combination of Dow and DuPont, which was first announced in 2015 and would create an agrochemical behemoth with a market cap of more than $145 billion.
The spin-off with FMC will only occur if the Dow-DuPont merger goes through, and that’s far from a done deal, as the two companies still must receive regulatory approval from a handful of major nations. Nonetheless, FMC stock closed Friday up more than 13%.
Dow and DuPont are hardly alone among chemical & gas companies in waiting to close deals that have long been announced. Since the two business unveiled their pact nearly 16 months ago, North American and European investors have agreed to 28 M&A deals in the space that still remain incomplete, according to the PitchBook Platform, including Bayer’s similarly outsized acquisition of Monsanto for $66 billion announced in September and an $11 billion deal between paint makers Sherwin-Williams and Valspar. That deal was also recently delayed after a US Federal Trade Commission review required Valspar to divest a portion of its portfolio to meet antitrust requirements.
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In that same time—since early December 2015—North American and European companies have closed 168 M&A transactions involving chemicals & gases companies, an average of 32 per quarter since the start of 2016.
Dow – DuPont Merger
PitchBook Platform users can access the full data on recent North American and European M&A activity in the chemicals & gases space.
Article by Adam Putz, PitchBook