FMC Corporation, a US-based agricultural sciences firm, has finalized an agreement to sell its commercial operations in India to Crystal Crop Protection Ltd for around $252 million. Crystal Crop, a crop solutions company based in New Delhi, aims to leverage FMC's innovative portfolio to enhance product access for Indian farmers.
According to Ankur Aggarwal, chairman and managing director of Crystal, this acquisition is expected to boost innovation in both chemical and biological crop protection sectors.
FMC will continue to benefit from cash flow generated by its Indian operations until the transaction closes, primarily through the monetization of working capital. The company plans to use the proceeds from this sale to reduce its debt.
Details of the Acquisition
The agreement includes the acquisition of FMC India's crop protection commercial operations, a license for FMC's brands in India, and a preferred supply agreement for select FMC active ingredients and formulations. Additionally, Crystal will gain preferred access to FMC's crop protection pipeline in the region.
This deal follows FMC's earlier announcement in July regarding its strategy to divest its crop protection commercial business in India, allowing it to focus on higher-growth opportunities globally.
Future Prospects
Crystal Crop Protection is preparing for an initial public offering (IPO) and has filed draft papers with the Securities and Exchange Board of India to raise approximately ₹600 crore. This includes a fresh issue and an offer for sale by existing shareholders.
FMC's chairman and CEO, Pierre Brondeau, expressed confidence in supporting Crystal's growth through the supply agreement while reaffirming FMC's commitment to India, including ongoing global R&D and manufacturing operations in the country.
Advisory Roles
BofA Securities served as the exclusive financial advisor to FMC, while EY acted as the exclusive buy-side M&A advisor for Crystal Crop Protection.
