FMC Splits into Two Independent Public Companies

Well-known diversified chemical company FMC (NYSE:FMC)
is splitting into two new entities: “NewFMC” and “FMC Minerals.”

The former will be comprised of FMC’s agricultural solutions and health and nutrition segments, while the latter will be focused on the company’s current mineral segment. The company anticipates that the separation will be completed in early 2015.

The company’s press release on the topic quotes Pierre Brondeau, FMC’s president, CEO and chairman, as saying that FMC has proactively managed its portfolio during the last four years as part of Vision 2013. “Our decision to separate into two independent companies is a natural progression of our strategy. We believe that creating two companies, each with its own publicly-listed equity, will enable the management of each company to pursue its own strategy. 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.”

Brondeau goes on to state that “[t]he creation of two independent companies will deliver meaningful benefits to each of the businesses, the communities in which we operate and all of our stakeholders. Our customers will continue to have collaborative relationships with financially strong organizations that are focused on meeting their needs, and our employees will have new career opportunities.”

Brondeau will stay on as CEO of New FMC, while a new CEO will be appointed to head the minerals division of the company in the coming months.

FMC Minerals will include the company’s alkali chemicals and lithium businesses. Both are structurally advantaged mineral businesses with cost-advantaged operations. FMC’s lithium arm is the only brine-to-metals producer with a broad global production portfolio and ties to the energy storage, pharmaceutical, polymer and industrial markets.

Although demand for lithium is not expected to impress investors in 2014, FMC sees strength underlying the market and believes demand will stem from the energy storage sector, brought on in particular by electric vehicle adoption.

Securities Disclosure: I, Vivien Diniz, hold no investment interest in any of the companies mentioned in this article.