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US-BASED Corteva has announced plans to separate the company into two independent\u00a0 publicly traded companies, New Corteva for its crop-protection business, and SpinCo for its seed business.<\/p>\n
Upon separation, current Corteva chair Greg Page<\/strong> will become chair of New Corteva, while Corteva chief executive officer Chuck Magro<\/strong> will become CEO of SpinCo.<\/p>\n Mr Magro said the move would ensure both businesses could maintain market-leader positions.<\/p>\n \u201cOver 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,\u201d Mr Magro said.<\/p>\n \u201cThe seed and crop-protection markets have evolved, and as a result, we see the opportunities ahead for both companies diverging \u2013 this is the right time to act to stay ahead of the market.<\/p>\n \u201cThis 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.\u201d<\/p>\n The separation is expected to be effected through a spin-off of SpinCo and be completed by the second half of 2026.<\/p>\n AI, gene-edited focus<\/p>\n During an investor webinar held following the announcement, Mr Magro gave an update on the key focuses for both business units.<\/p>\n 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.<\/p>\n \u201cThe 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.<\/p>\n \u201cThis is why we believe that the continued success of SpinCo will be predicated upon sustained investment in advanced genetics, that is unlocking a plant\u2019s genetic code to unleash previously unreachable breakthroughs to accelerate the pace of innovation.\u201d<\/p>\n Mr Magro said Corteva currently operated in the corn and soybean sectors, and its new structure\u00a0 offers scope to expand into other row crops and potentially fruits and vegetables.<\/p>\n \u201cSpinCo will also look to expand on new opportunities in wheat, cotton, rice and other products where genetics can play a transformative role.\u201d<\/p>\n 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.<\/p>\n He told investors SpinCo would target 2027 for the launch of this technology.<\/p>\n Biologicals part of growth<\/p>\n New Corteva, the fourth-largest participant in the global crop-protection market, will continue to target sustainable crop health solutions under the new structure.<\/p>\n Mr Magro said the crop protection segment had \u201calways been competitive\u201d, but he believed the market would \u201creturn to growth in the near future\u201d.<\/p>\n He said new and differentiated technologies would be key to succeeding in this space.<\/p>\n \u201cThe [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.<\/p>\n \u201cAs a result, the things we\u2019ve 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.\u201d<\/p>\n