SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15 (d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported)
October 31, 2000
FMC CORPORATION
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(Exact name of registrant as specified in its charter)
Delaware 1-2376 94-4079804
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(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification No.)
200 East Randolph Drive, Chicago, Illinois 60601
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(Address of principal executive offices) (Zip Code)
(312) 861-6000
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Registrant's telephone number,
including area code
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Item 5. Other Events
On October 31, 2000, FMC Corporation issued the following release:
FMC TO SPLIT INTO CHEMICALS AND MACHINERY COMPANIES;
PLANS IPO OF ITS MACHINERY BUSINESS;
ANTICIPATES TAX-FREE MACHINERY SPIN-OFF IN 2001
CHICAGO, October 31, 2000--FMC Corporation today announced a strategic
restructuring that ultimately would split the corporation into two, independent
publicly traded companies--a machinery business and a chemicals business.
According to FMC Chairman and CEO Robert N. Burt: "We believe this action
should allow all our businesses to take a more focused, entrepreneurial approach
to growing their individual markets and serving their customers more effectively
in a marketplace that values speed, customer focus, innovation and, above all,
growth. The net result should be increased earnings power."
He pointed out that the two groups had few synergies, with different
customers, different technologies, different research and development
requirements. "This move will allow each business to strengthen their own
identities, maximize growth potential and focus management expertise on their
respective operations," Burt noted.
"This split also would allow shareholders to realize the value inherent in
both our machinery and chemicals businesses. Because we've operated as a
diversified company, much of that value, especially in our oil field services
business, is not being recognized by the stock market. The financial community
would be able to make more focused investment decisions," he said.
As the first step, FMC said it is planning an initial public offering of up
to 20 percent of the machinery business by the second quarter 2001. FMC intends
to use the proceeds from the offering to reduce FMC debt. Subject to market
conditions, final board approval and a favorable tax ruling, FMC intends to make
a tax-free distribution of the remaining shares of the machinery company by the
end of 2001.
Burt will continue as FMC chairman and chief executive officer and will
oversee the restructuring. Under this plan, the chemicals business initially
would continue to operate under the current FMC corporate structure. As
independent companies, each business will have its own management team and board
of directors. FMC said that FMC President Joe Netherland will run the machinery
business, which will be headquartered in Chicago. The chemicals business
ultimately will be headquartered in Philadelphia, with a management team to be
announced at a later date.
"FMC has a long and proud history as a company able to re-invent itself to
meet the needs of our customers and to provide value to our shareholders," said
Burt. "This next step better focuses us on providing technology and providing
solutions to customers that meet the needs of the marketplace."
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The company does not expect any significant impact on overall employment as
a result of the restructuring, but acknowledged that re-assignments are likely
next year, given the need to support the new structures of the businesses.
Current responsibilities for line operations below the corporate level are
unlikely to change, so reassignments are likely to be limited to Chicago staff.
Merrill Lynch is financial advisor to FMC and is anticipated to be the lead
underwriter for the planned initial public offering.
The machinery company will comprise FMC's Energy Systems and Food and
Transportation Systems businesses. In total, these businesses represent about
$2 billion in 1999 sales and more than $160 million in operating profit. The
largest business is the $1.1 billion Energy Services business, which is focused
on deepwater, offshore development of oil and gas fields. Its broad range of
capabilities and fast-track technological leadership make FMC Energy Systems the
market leader in providing integrated deepwater production systems. Revenues
for Energy Systems have grown 15 percent per year since 1993. Acquisitions
added to growth in the subsea, floating production and measurement markets--with
key acquisitions in Norway and Brazil strengthening FMC's global position. In
addition, year 2000 research and development expenditures are three times the
1996 level, strengthening the company's ongoing technology leadership position.
Within the food processing industry, FMC FoodTech is a global food industry
supplier and technology leader, holding number one or number two positions in
the niches where it competes, including citrus systems, sterilizing, freezing
systems and poultry processing. Equipment provided by FMC Airport Systems is
standard for modern airports and airlines, from helping passengers board
aircraft to loading cargo to deicing planes.
The chemicals business, totaling about $2 billion in 1999 sales and more
than $280 million in operating profit, will be composed of FMC's specialty and
industrial chemicals businesses, as well as its Agricultural Products Group.
Within Specialty Chemicals, FMC applies leading-edge technology to highly
specific applications in three major market areas: food ingredients,
pharmaceuticals and specialty applications. Its biopolymer business is a leading
supplier of carrageenan, alginate and microcrystalline cellulose used in food
applications and in providing solutions to the pharmaceutical and personal care
industries. Within Industrial Chemicals, FMC holds strong positions--driven by
innovative process technology--in three high-volume chemical groups: soda ash,
hydrogen peroxide and phosphates. FMC's Agricultural Products business has a
strong portfolio of crop protection products that meet important market needs
around the globe. Efforts focus on lower application rates, more environmentally
compatible products, alternatives to insect-resistant products and products that
can be adapted to developing countries. A genomics-based discovery strategy,
focused on insecticides, holds the promise of future, cost-effective innovation.
The spin-off is subject to market conditions, among other conditions.
In the event that FMC does not complete the spin-off, FMC may pursue other
strategic restructuring options.
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Safe Harbor Statement under the Private Securities Act of 1995: Except for
the historical information contained herein, this news release contains forward-
looking statements that are subject to risks and uncertainties relating to the
proposed initial public offering and spin-off of FMC's machinery business,
including the impact of the proposed initial public offering and spin-off on
FMC's and the new company's results of operations, the financial accounting
consequences of the proposed transaction, the impact of the spin-off on FMC's
stock price and its relationships with customers and employees, the tax
consequences of the transaction to FMC and its stockholders, changes in business
climate or market conditions or other factors which could make the proposed
initial public offering or spin-off unadvisable. Statements in this news
release that are forward-looking statements are also subject to various risks
and uncertainties concerning specific factors in the corporation's 1999 Form
10-K and other SEC filings. Such information contained herein represents
management's best judgment as of the date hereof based on information currently
available. The corporation does not intend to update this information and
disclaims any legal obligation to the contrary.
There will be a live audio webcast of FMC's regularly scheduled biannual
meeting with security analysts beginning at 8:30 a.m. (Eastern Standard Time) on
Friday, November 3, 2000. The event will be available on www.fmc.com--as will a
replay. Please note that Real Network's Real Player is required to access the
audio webcast. It can be downloaded from www.real.com.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
FMC CORPORATION
By /s/ Stephen F. Gates
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Stephen F. Gates
Senior Vice President, General
Counsel and Secretary
Date: October 31, 2000