Corteva Inc. (NYSE:CTVA) is reportedly considering a major restructuring that would split its seed and pesticide operations into two separate entities. The pure-play agriculture company, valued at roughly $50 billion, could announce its plans soon if negotiations stay on track.
Corteva offers a portfolio of seed and crop protection solutions.
The move would mark another significant shift in the industry amid mounting challenges for farmers and ongoing consolidation among agri-businesses.
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Formed from the 2019 spinout of DowDuPont, Corteva has seen its stock soar nearly 150% since then, including a 25% gain this year.
CEO Chuck Magro, who took charge in 2021 following activist investor pressure, has restructured the company and improved forecasts.
The proposed breakup could trigger a wave of mergers and acquisitions across agriculture, similar to moves seen during the Trump administration, such as Bayer AG’s (OTC:BAYRY) $63 billion Monsanto acquisition. Amid falling crop prices and rising costs, farmers continue to invest in premium seeds and crop protection products.
The Wall Street Journal reported that together with Bayer, Corteva controls about 70% of the U.S. corn and soybean seed market.
A separation of its seed business from pesticides could help Corteva avoid potential liabilities linked to chemical products. Bayer has faced billions in legal settlements over claims that its Roundup herbicide causes cancer, though Bayer maintains its product’s safety.
As per the WSJ report on Friday, Corteva has not faced similar lawsuits, but could be acting proactively to protect its seed operations from future risks.
In August, Corteva, along with The Chemours Company (NYSE:CC), and DuPont de Nemours, Inc. (NYSE:DD), announced a settlement to comprehensively resolve all pending environmental and other claims by the State of New Jersey against the companies in various litigation matters and other state directives.
The Settlement will resolve all legacy contamination claims related to the companies’ current and former operating sites (Chambers Works, Parlin, Pompton Lakes, and Repauno) and claims of statewide PFAS contamination unrelated to those sites, including from the use of aqueous film-forming foam.
Corteva reported second-quarter adjusted earnings of $2.20 per share, beating the consensus of $1.87.
Sales increased 6% year over year to $6.46 billion, beating the consensus of $6.26 billion.
Seed sales were $4.54 billion. Crop Protection net sales were approximately $1.92 billion.
Corteva raised fiscal 2025 adjusted earnings per share guidance from $2.70-$2.95 to $3.00-$3.20 compared to the consensus of $3.00.
The company also raised 2025 sales guidance from $17.2 billion-$17.6 billion to $17.6 billion-$17.8 billion compared to the consensus of $17.27 billion.
Price Action: CTVA stock is trading higher by 0.97% to $75.01 premarket at last check Monday.
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