Iridian exits FMC Corp.
Iridian sold its entire stake in FMC Corp. (FMC), which had occupied 1.94% of the fund’s 3Q14 portfolio. FMC Corp. is held by the Vanguard Total Stock Market ETF (VTI) in an amount representing 0.03% of its portfolio.
FMC serves agricultural, consumer, and industrial markets worldwide. The diversified chemical company operates in three distinct business segments:
The FMC Agricultural Solutions segment serves the agrochemicals industry and sells insecticides, herbicides, and fungicides. This segment develops and manufactures a portfolio of crop protection, professional pest control, lawn, and garden products.
The FMC Health and Nutrition segment focuses on food, pharmaceutical ingredients, nutraceuticals, personal care, and similar markets. This segment sells its products to customers in noncyclical end markets.
The FMC Minerals segment manufactures a wide range of inorganic materials, including soda ash and lithium. The glass and detergent industries use soda ash, while lithium figures in energy storage, specialty polymer processes, and pharmaceutical synthesis. FMC noted that the adoption of electric vehicles and other applications has driven the underlying market demand for lithium in the energy storage market.
FMC to sell Alkali Chemicals business to Tronox Limited
FMC entered into a definitive agreement for selling its Alkali Chemicals business for $1.64 billion to Tronox Limited. The transaction is expected to close by the first quarter of 2015.
Following its announcement in September 2014 to acquire agrochemical manufacturer Cheminova, FMC disclosed its intention to undertake a divestiture of its Alkali Chemicals business for reducing the debt related to the pending acquisition of the company.
FMC acquires global rights for new herbicide
FMC obtained global rights for a new herbicide from research companies based in Japan, Ihara Chemical Industry Co. and Kumiai Chemical Industry Co. The herbicide is reportedly effective in controlling broadleaf weeds.
This herbicide would be developed initially to be applied to sugarcane, soybeans, cereals, and corn in major international markets. All rights pertaining to the intellectual property associated with the new herbicide would be held by FMC.
Highlights of 4Q14 financial performance
FMC Corporation reported $1.1 billion in consolidated revenues during 4Q14, which was a 3% decline compared to the same quarter in the previous year. This figure also fell short of the consensus estimate of $1.18 billion. Consolidated EPS was $1.12, representing a 7% increase.
Earnings for the Agricultural Solutions segment were $130 million, a 5% decline compared to a prior year quarter. During that time, earnings for the Health and Nutrition and Minerals segments increased by 9% and a significant 32%, respectively.
Iridian’s key position changes for 4Q14
Iridian initiated new positions in Micron Technology (MU) and Targa Resources (TRGP). The fund exited its position in FMC Corp. (FMC) and Occidental Petroleum Corp. (OXY). Iridian adopted a bullish stance to Masco Corp. (MAS) and a bearish stance with respec to NCR Corporation (NCR) and AutoZone (AZO).
We will cover Iridian’s exit from Occidental Petroleum Corp. in the next part of this series.