Acquisitions

3 Months Ended

Mar. 31, 2019

DuPont Crop Protection Business

On November 1, 2017, pursuant to the terms and conditions set forth in the Transaction Agreement entered into with E. I. du Pont de Nemours and Company ("DuPont"), we completed the acquisition of certain assets relating to DuPont's Crop Protection business and research and development ("R&D") organization (the "DuPont Crop Protection Business") (collectively, the "DuPont Crop Protection Business Acquisition"). In connection with this transaction, we sold to DuPont our FMC Health and Nutrition segment and paid DuPont $1.2 billion in cash which was funded with the 2017 Term Loan Facility which was secured for the purposes of the acquisition.

The following table illustrates each component of the consideration paid as part of the DuPont Crop Protection Business Acquisition:



(in Millions)	Amount
Cash purchase price, net ⁽¹⁾	$	1,225.6
Cash proceeds from working capital and other adjustments	(21.5		)
Fair value of FMC Health and Nutrition sold to DuPont	1,968.6
Total purchase consideration	$	3,172.7

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(1)	Represents the cash portion of the total purchase consideration paid for the DuPont Crop Protection Business Acquisition.

As part of the DuPont Crop Protection Business Acquisition, we acquired various manufacturing contracts. The manufacturing contracts have been recognized as an asset or liability to the extent the terms of the contract are favorable or unfavorable compared with market terms of the same or similar items at the date of the acquisition.

We also entered into supply agreements with DuPont, with terms of up to five years, to supply technical insecticide products required for their retained seed treatment business at cost. The unfavorable liability is recorded within both "Accrued and other liabilities" and "Other long-term liabilities" on the condensed consolidated balance sheets and is reduced and recognized to revenues within earnings as sales are made. The amount recognized in revenue for the three months ended March 31, 2019 was approximately $27 million.

Certain manufacturing sites and R&D sites were transferred to us at a later date due to various local timing constraints; however, we obtained the economic benefit from these sites during the period from November 1, 2017 to when the sites legally transfer. No additional consideration was paid at the date of transfer. A portion of one site is expected to transfer in the fourth quarter of 2019.

The DuPont Crop Protection Business is being integrated into our business and has been included within our results of operations since the date of acquisition.

The purchase price allocation was considered complete in 2018. Refer to Note 4 of our 2018 Form 10-K for further information.

Transaction-related charges

Pursuant to U.S. GAAP, costs incurred associated with acquisition activities are expensed as incurred. Historically, these costs have primarily consisted of legal, accounting, consulting, and other professional advisory fees associated with the preparation and execution of these activities. Given the significance and complexity around the integration of the DuPont Crop Protection Business, we have incurred to date, and expect to incur, costs associated with integrating the DuPont Crop Protection Business, planning for the exit of the transitional service agreement as well as implementation of a new worldwide Enterprise Resource Planning system as a result of the transitional service agreement exit, the majority of which will be capitalized in accordance with the relevant accounting literature. These costs have been, and are expected to be, significant and we anticipate the majority of these charges will be completed by the first quarter of 2020. The following table summarizes the costs incurred associated with these activities.



	Three Months Ended March 31,
(in Millions)	2019		2018
DuPont Crop Protection Business Acquisition
Legal and professional fees ⁽¹⁾	$	16.5	$	19.6
Inventory fair value amortization ⁽²⁾	—		29.9
Total Transaction-related charges	$	16.5	$	49.5

Restructuring charges
DuPont Crop restructuring ⁽³⁾	$	3.9	$	1.0
Total DuPont Crop restructuring charges	$	3.9	$	1.0

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(1)	Represents transaction costs, costs for transitional employees, other acquired employees related costs, and transactional-related costs such as legal and professional third-party fees. These charges are recorded as a component of “Selling, general and administrative expense" on the condensed consolidated statements of income (loss).


(2)	These charges are recorded as a component of "Costs of sales and services" on the condensed consolidated statements of income (loss).

(3)

See Note 10 for more information. These charges are recorded as a component of “Restructuring and other charges (income)” on the condensed consolidated statements of income (loss).