(Reuters) -Corteva said on Wednesday it would separate its seed and pesticide businesses into separate publicly traded companies, as the agrichemicals firm seeks to sharpen its strategic focus and boost shareholder returns.
The separation will allow each company to set specific capital allocation strategies, respond faster to market shifts and pursue growth opportunities independently, Corteva said.
"The seed and crop protection markets have evolved, and as a result, we see the opportunities ahead
for both companies diverging – this is the right time to act to stay ahead of the market," CEO Chuck Magro said.
Shares of Corteva rose nearly 1% in premarket trading following the news. The Wall Street Journal had first reported Corteva's plans of a split on September 12, and the company stock has fallen 9% since then over concerns that the split would disrupt operations and cause value dilution.
Corteva's seed business generated about 57% of its total net sales of $16.90 billion last year, with the remaining coming from its crop-protection segment, which produces herbicides, fungicides, insecticides and seed treatments.
The company itself was formed after chemical conglomerate DowDuPont split into three entities in 2019. Since then, its shares have risen over 133%, and the firm now commands a market value of $45.93 billion.
The agrichemical firm joins several industry giants such as Kraft Heinz, Warner Bros Discovery and DuPont
Corteva's split follows six years of cost cuts, portfolio simplification and investment in new technologies that helped strengthen its position in both segments.
The company expects the spin off to be completed in the second half of 2026.
Following the split, CEO Magro will become the chief executive of the spun-off company that will house the seed business. Corteva chairman Greg Page will remain in his position at the existing company that will run the crop protection segment.
(Reporting by Vallari Srivastava in Bengaluru; Editing by Shailesh Kuber and Leroy Leo)
