Corteva shares fall as potential split report stirs worries over operational disruptions

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By Pooja Menon and Sumit Saha

(Reuters) -Corteva shares fell about 4% on Monday after a report the U.S. agrichemicals company was looking to separate its seed and crop protection chemical businesses stoked concerns about potential operational disruption and value dilution.

The combined business model has historically delivered strong synergies, including co-developed seed traits and crop protection products, as well as bundled solutions for farmers.

Corteva’s potential split of its seed and crop protection businesses lacks clear strategic or financial merit and could weaken both units, Bank of America analyst Matthew DeYoe said.

A split could particularly impact the integrated R&D platform that has produced products like the Enlist weed-control system.

The seed business generated about 56.5% of total net sales of $16.90 billion last year, while its crop-protection segment, which includes herbicides, fungicides, insecticides, and seed treatments, accounted for 43.5%.

The Wall Street Journal reported on Friday that Corteva is considering separating its two businesses, joining other major companies like Kraft Heinz, Warner Bros Discovery, and Honeywell that have spun off units to boost shareholder returns.

Wolfe Research noted CEO Chuck Magro’s history of pursuing shareholder value but emphasized that a split is not strategically necessary.

Corteva did not immediately respond to a Reuters request for comment on Monday.

The company was formed from the agribusiness division spun off from DowDuPont in 2019, following the 2017 merger of Dow and DuPont. It is among the largest U.S. crop protection producers, competing with Syngenta and German firms BASF and Bayer.

Corteva shares have gained about 26% this year, giving the company a market capitalization of about $50.45 billion.

(Reporting by Pooja Menon and Sumit Saha in Bengaluru)