FMC (FMC 70.49, +8.99) has jumped 14.6% after agreeing to trade business units with DuPont (DD 81.17, -0.53).
Today's announcement comes as DuPont and Dow Chemical (DOW 63.94, -0.24) work to complete their merger. Per European regulatory requirements, DuPont had to divest its crop protection business, which will now be transferred to FMC. As a result, FMC will control a global chewing pest insecticide portfolio, global cereal broadleaf herbicides, and a large portion of DuPont's global crop protection Research & Development capabilities.
In exchange, DuPont will receive FMC's Health and Nutrition business and financial considerations of $1.60 billion to offset the difference in the value of the assets. DuPont will receive $1.20 billion in cash and working capital of $425 million.
FMC expects that the acquisition will boost its estimated annual revenue to $3.80 billion. FMC's acquired business is expected to generate $1.50 billion in revenue in 2017. The transaction is expected to have an immediate impact on earnings per share, and a guidance update will be given on May 2, 2017 when the company hosts its next earnings conference call.