Corteva to acquire Stoller for $1.2bn in deal seen as an ‘opening salvo’

By Sam Boughedda

Corteva (NYSE:) announced before the open on Wednesday that it has agreed on a deal to acquire Houston-based Stoller for $1.2 billion in cash.

Corteva told investors that Stoller brings in global sales of over $400 million and a presence in more than 60 countries while reinforcing the firm’s commitment to “driving value for farmers through innovative, sustainable solutions.”

The deal represents the second Biologicals acquisition for Corteva this year after it recently announced it has signed a definitive agreement to acquire Symborg.

Corteva anticipates the deal will be completed in the first half of 2023.

Reacting to the news, Morgan Stanley analysts said the firm sees Stoller “as a strategic – immediately accretive – acquisition at a reasonable price that positions the company well to build out further in biologicals through Corteva led initiatives, Stoller’s products/footprint, as well as the recently announced Symborg acquisition.”

“We also view it as the opening salvo in the company putting its under-levered balance sheet to work – a key driver of our bull case,” added the analysts, who have an Overweight rating and a $70 per share price target on the stock.

Elsewhere, Mizuho analysts have a Buy rating and a $76 price target on Corteva.

They said in a note: “Our knee-jerk reaction is this deal is consistent with CTVA’s stated goals to bring complementary biologicals technologies in-house to align the portfolio with expected industry growth over the next decade-plus (expect biologicals to grow at HSD CAGR and represent 25% of CPC market by 2035) – though this deal is larger than many were expecting.”

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