This story was updated at 12:06 p.m. on Oct. 1 to add new information.

Corteva Agriscience’s split into Vylor and New Corteva is effective today, officially separating the seed and pesticide divisions into two independent, publicly traded companies. 

Vylor will focus on seeds and genetics and be headquartered in Johnston. New Corteva will focus on crop protection and be based in Indianapolis, the current headquarters for Corteva.

City of Johnston Economic Development Director Josh Laraby said the Vylor headquarters represents significant long-term economic investments in metro Des Moines and builds upon the foundation planted in Johnston. 

“This headquarters will help to retain talent here in Johnston, while also creating pathways for future growth for Vylor and its employees within their campus,” Laraby wrote in an email. “The city is proud of its partnership with Vylor, and we’re eager to continue growing and evolving alongside the company.”

The city continues its discussions with Vylor and the move will provide stability to many employees who will live in or commute to Johnston. 

“Vylor employees are connected to Johnston, and the metro, because they live here, work here and support the local economy,” Laraby wrote. “We have long enjoyed a good relationship with Corteva, and look forward to building strong bonds with Vylor now that they are a part of our community.”

New companies plot a course post-separation

Vylor and New Corteva signaled continued investment in innovation, intellectual property and talent during their Investor Day events on Sept. 15.

Vylor CEO Chuck Magro shared that the company plans to invest about 10% of sales into research and development efforts and will launch new technologies to advance corn, soybean and wheat production and better protect the crops against insects, disease, weeds and weather through gene editing.

Magro said Vylor is a high-margin growth platform, entering a new growth business with several new products and market launches. 

“This is a structural shift from product to platform, from seed seller to technology provider,” Magro said. 

Vylor anticipates a revenue compound annual growth rate (CAGR) of 3%-4% and an earnings before interest, taxes, depreciation and amortization CAGR of 7%-8%. 

Ongoing legal challenges

Magro defended the split during the company’s Investor Day after a group of state attorneys general asked a federal judge in September to stop Corteva from separating into two publicly traded companies, the Des Moines Register reported. 

In a motion filed in U.S. District Court for South Carolina, 19 states, Puerto Rico and the District of Columbia allege that Corteva is attempting to shift $39 billion in assets to Vylor Inc., the new seed company, to avoid liability for harm caused by per- and polyfluoroalkyl substances, commonly referred to as PFAS or “forever chemicals.”

On Oct. 1, the Register reported that the lawsuit challenging the separation has failed after a federal court denied a request by California and about two dozen other entities yesterday for a temporary restraining order and injunction stopping the split.

Cities and states across the country have filed lawsuits seeking financial relief from PFAS manufacturers to clean up the chemicals. Among those companies is DuPont, which became part of Corteva in 2019. The Register reported that the bulk of DuPont’s assets and value will be spun off into Vylor. 

During a question-and-answer session at the Investor Day, Magro said the company rejected the allegations and defended the separation.

“When we first announced the separation, it was driven by an extensive review by the board of directors and the management team,” Magro said. “We believe that we’re separating because it’s going to make two very strong financially capable companies. We believe it is the right thing to do for all stakeholders and it was a strategic set of business decisions.” 

In an unrelated lawsuit, Iowa Attorney General Brenna Bird announced a $35 million settlement in a multistate case brought by the Federal Trade Commission against Corteva, which alleged Corteva conducted a loyalty program that violated monopoly laws and limited the sale of less-expensive, generic pesticides. Iowa will receive about $2.4 million from the settlement, according to a press release. 

The original lawsuit was filed against both Corteva and Syngenta. The case against Syngenta is ongoing and a trial date has not been scheduled. 

The lawsuit said that the loyalty programs paid distributors to limit how much they sold of generic and rival manufacturers’ products, which raised costs to farmers by stifling competition and keeping less-expensive alternatives off the shelves. 

“This is a great win for Iowa farmers, but also for all Iowans,” Bird said in a statement. “Higher input prices for farmers growing our food mean higher prices at the grocery store. Iowa farmers and families deserve a marketplace without inflated prices.”