UPL Global and the End of the Ag Conglomerate Era

Last week, I briefly highlighted that UPL announced a three-phase corporate reorganization that will combine its India crop protection business (UPL SAS) and its international crop protection and biologicals business (UPL Corp) into a new, independently listed entity called UPL Global.

In the next 12-15 months when it is expected to be completed, UPL Global will become the #2 largest listed pure-play crop protection company globally, sitting behind only a post-split Corteva.

Overview

The dynamics of the split are relatively straightforward, but it’s important to lay out the current structure of the UPL business — from crop protection to manufacturing, to seeds and specialty chemicals.

UPL Ltd. is currently the entity listed on Indian exchanges. It functions as a single listed parent company that houses each distinct business:

• UPL SAS: The domestic, India-focused crop protection business (90.91% owned by UPL Ltd).

• UPL Corp: The international crop protection and biologicals business (77.78% owned). It includes minority investment from various PE firms.

• Advanta Enterprises: The global seeds business.

• Specialty Chemicals (Superform): A B2B manufacturing arm that provides formulations and specialty chemicals to the wider industry. Including the Decco post-harvest business.

Currently, if someone buys shares in UPL Ltd. they get exposure to all of those businesses. This complexity can lead to challenges for investors, as I talked about in the Corteva spin coverage.

UPL is moving away from it's conglomerate-like structure through a multi-step process:

Step 1: Fully merge UPL SAS (India crop protection) into UPL Ltd.

Step 2: Spin out the India crop protection business from UPL Ltd. into a new entity, UPL Global.

Step 3: Merge UPL Corp (international crop protection + biologicals) into UPL Global.

The result is two distinct listed entities: UPL Ltd. and UPL Global.

UPL Global becomes the pure-play crop protection and input company across the world.

UPL Ltd. retains formulations, and specialty chemicals (Superform).

Then there is technically a third, the seeds segment, Advanta, which is in the process of being spun out itself as well.

The benefit comes through a few mechanisms, including a benefit for current PE investors like TPG and cleaner access to capital markets, but also clearer focus for the UPL Global business.

UPL Global becomes a pure-play crop protection and biologicals business housing both the India and international businesses under one roof. Mike Frank, who has been leading UPL Corp's global crop protection business, will be CEO of UPL Global.

For context, UPL Corp. has been the largest component of the crop protection business, making up 90+% of the crop protection revenue, however, the value of the combination isn't really about revenue scale and it's more about eliminating the structural complexity of having the India and international crop protection businesses sitting in different corporate entities with different investor bases, and presenting one clean pure-play story to the market.

Why This Matters

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