US-BASED Corteva has announced plans to separate the company into two independent publicly traded companies, New Corteva for its crop-protection business, and SpinCo for its seed business.
Upon separation, current Corteva chair Greg Page will become chair of New Corteva, while Corteva chief executive officer Chuck Magro will become CEO of SpinCo.
Mr Magro said the move would ensure both businesses could maintain market-leader positions.
“Over the past six years, we have taken deliberate steps to build a strong, successful technology company: we simplified our portfolio, reduced cost, invested in high-return endeavors, and ensured our pipeline would maximise impact to farmers and returns to the company,” Mr Magro 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.
“This separation will allow both businesses to maximise long-term value creation by focusing on their own priorities; as such, we see this separation as the logical next step in their growth trajectory.”
The separation is expected to be effected through a spin-off of SpinCo and be completed by the second half of 2026.
AI, gene-edited focus
During an investor webinar held following the announcement, Mr Magro gave an update on the key focuses for both business units.
He said the seed sector in which SpinCo will dominate offered an opportunity to expand into the advanced plant-genetics space, including the growing area of gene-edited crops.
“The application of AI tools will give us the ability to accelerate new innovation, which when combined with advanced genetics, could unlock new opportunities across numerous species.
“This is why we believe that the continued success of SpinCo will be predicated upon sustained investment in advanced genetics, that is unlocking a plant’s genetic code to unleash previously unreachable breakthroughs to accelerate the pace of innovation.”
Mr Magro said Corteva currently operated in the corn and soybean sectors, and its new structure offers scope to expand into other row crops and potentially fruits and vegetables.
“SpinCo will also look to expand on new opportunities in wheat, cotton, rice and other products where genetics can play a transformative role.”
Almost a year ago, Corteva announced a breakthrough in hybrid wheat technology, a non-GMO system which has the potential to increase yields by 10 percent and make crops more drought resistant.
He told investors SpinCo would target 2027 for the launch of this technology.
Biologicals part of growth
New Corteva, the fourth-largest participant in the global crop-protection market, will continue to target sustainable crop health solutions under the new structure.
Mr Magro said the crop protection segment had “always been competitive”, but he believed the market would “return to growth in the near future”.
He said new and differentiated technologies would be key to succeeding in this space.
“The [crop-protection] market also needs and still values effective differentiated technology, as we see in the rapidly expanding biologicals segment, and price premiums for patented technology.
“As a result, the things we’ve been highlighting over the past year or two, including our [crop protection] new products and biologicals, should allow New Corteva to continue to grow above the market and improve its margin profile in the near term.”
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