FMC Corp. (FMC) has secured worldwide rights to a new proprietary herbicide from Japan-based premier research companies – Kumiai Chemical Industry Co., Ltd., and Ihara Chemical Industry Co., Ltd. Terms of the deal were not divulged.
The herbicide is highly effective in controlling broadleaf weeds. It will be initially developed for applications in corn, cereals, soybeans and sugarcane across major nations globally. FMC Corp. holds all intellectual property rights to the new herbicide.
The acquisition of rights to the novel herbicide, which has potential across a host of crops, continues FMC Corp.’s strategic collaboration with Kumiai and Ihara. Both Kumiai and Ihara have developed a rich pipeline for new crop protection products that are vital for increased food production. FMC Corp. along with Kumiai and Ihara has been evaluating the commercial potential for the herbicide during the last two years.
FMC Corp. expects growth in its agricultural business to be supported by sustained market penetration in Latin America and new product introductions. Moreover, higher demand in health markets and expanding portfolio are expected to drive results in the company's health and nutrition franchise.
FMC Corp. maintains a strategy of growth through acquisitions and strategic collaborations. The proposed acquisition of crop protection products maker – Cheminova A/S – for $1.8 billion is a strategic fit for the company. The buyout is expected to bolster the company’s agriculture business and reinforce its access in major agricultural end-use markets.
However, FMC Corp. is exposed to certain operational challenges in Argentina and currency headwinds. The company is also seeing weak demand for its health and nutrition products in some beverage applications in China, which is expected to continue in the fourth quarter of 2014.
FMC Corp., which currently holds a Zacks Rank #4 (Sell), will report its fourth-quarter results after the close on Feb 4.
Better-ranked stocks in the chemicals space include Compass Minerals International Inc. (CMP), Innophos Holdings Inc. (IPHS) and Olin Corp. (OLN), all of which carry a Zacks Rank #1 (Strong Buy). Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report FMC CORP (FMC): Free Stock Analysis Report OLIN CORP (OLN): Free Stock Analysis Report COMPASS MINERLS (CMP): Free Stock Analysis Report INNOPHOS HLDGS (IPHS): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research
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