Corteva Inc. (NYSE: CTVA) shares closed Thursday at $12.57, down about 83.8% from its previous close of $77.65, as the company completed the separation of its seed business into Vylor Inc. (NYSE: VYLR).
The 83.8% decline reflects a comparison between pre-spin Corteva and post-separation CTVA, while the separated seed business now trades independently as Vylor. Eligible Corteva shareholders received one Vylor share for every CTVA share they held, and Vylor closed its first regular trading session at $68.26.
The two stocks therefore finished Thursday at a combined $80.83, compared with Corteva’s $77.65 close before the distribution. Vylor’s filing confirms that the seed business became an independent publicly traded company through the Oct. 1 distribution.
Separately, Corteva disclosed that its board waived part of a closing condition tied to potential legal restraints one day before the separation took effect. The waiver did not drive the 84% stock decline, but it helps explain how Corteva completed the transaction while legal challenges surrounding the separation were still developing.
Waiver Removed One Contractual Obstacle to Closing
Corteva said in a Form 8-K filed Oct. 1 that the separation was subject to a “Legal Restraints Condition” requiring that no governmental order, injunction, decree, or other legal restraint preventing the distribution or related transactions be pending, threatened, issued, or in effect.
Effective Sept. 30, the board waived the condition insofar as a potential governmental order, injunction, or decree could otherwise have prevented the separation from closing.
The separation agreement gave Corteva discretion to waive closing conditions to the extent permitted by applicable law. The board’s action therefore removed a contractual condition that could otherwise have prevented Corteva from completing the distribution. It did not cancel a court order or give the company authority to disregard an enforceable injunction.
That distinction matters because the legal disputes did not disappear when the contractual condition was waived. On the same day, the U.S. Court of Appeals for the Fourth Circuit reversed a lower-court decision that had prevented California from pursuing a temporary restraining order and preliminary injunction against the separation. The appeals court did not rule whether to grant an injunction and sent the matter back to the district court, which then denied California’s request to block the transaction.
The filing did not explain why the board granted the waiver or link the action to California’s injunction effort.
PFAS Liabilities Remain a Separate Legal Issue
The separation also faces litigation tied to legacy liabilities involving per- and polyfluoroalkyl substances, or PFAS.
Fifteen states and Guam sued Corteva and Vylor in Indiana state court on Oct. 1, alleging that the transaction moved valuable seed assets into Vylor while leaving legacy PFAS liabilities with Corteva, reducing assets available to potential creditors. Those claims are allegations by the plaintiffs and have not been established as fact.
In a Sept. 14 statement responding to an earlier effort by state attorneys general to block the separation, Corteva said it had no intent to hinder, delay, or defraud creditors and that its balance sheet would be well-equipped to cover liabilities it may face.
The separation agreement assigns certain defined legacy liabilities to post-spin Corteva, including liabilities of Corteva and EIDP under the companies’ 2021 PFAS memorandum of understanding.
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