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It seemed a sudden decision, out of the blue.
In a brief announcement in February 2022, agriculture giant Corteva Agriscience Inc. said it was moving its headquarters to Indianapolis from Wilmington, Delaware, effective immediately.
The bombshell announcement almost seemed like an afterthought. The headquarters relocation was the fifth sentence in a press release, following news that a Corteva executive vice president would retire.
But as Corteva CEO Chuck Magro described it Monday to a lunch audience at the Economic Club of Indiana, the decision was anything but hasty or haphazard.
Magro had joined Corteva, a maker of agricultural seeds, pesticides and herbicides in 2021, coming from Nutrien, a large producer of nitrogen fertilizer, based in Saskatchewan, Canada.
“And my first meeting with the board [of Corteva], they said, ‘Chuck, we’re not sure you should be in Wilmington. Maybe you should think about relocating the headquarters,’” Magro recounted to an audience of several hundred at the Indiana Convention Center.
“And I thought to myself, great, the very first thing—the very first act I’m going to do as a CEO was to move my headquarters from Wilmington, Delaware, where our president [Joe Biden] is from,” Magro continued. “Oh, my goodness sakes, what did I get myself into?”
At the time, Corteva was based on the campus of DuPont de Nemours Inc., the 220-year-old conglomerate that had merged with Dow Chemical in 2016 to form DowDuPont. Three years later, in 2019, the merged companies were spun off into three independent companies, with Corteva Agriscience as the agricultural technology player.
In fact, Indiana officials had tried unsuccessfully at the time to get DowDuPont to designate Indianapolis as the agricultural company’s headquarters.
Instead, in February 2016, Dow and DuPont announced that Wilmington would be the headquarters for the combined agricultural businesses, and that Indianapolis would be one of its two “global business centers.” The other center would be in Johnston, Iowa, longtime home to DuPont’s Pioneer seed business.
But in 2021, Corteva was free to choose a new headquarters location.
The decision to move was likely a jolt to many Corteva employees. In an interview with the Wilmington News Journal in 2019, then-CEO Jim Collins said Corteva was “focused” in Delaware and in a “good setup.” The company’s corporate functions and about 500 Corteva employees worked in Delaware.
But as the Corteva executive team thought about the possibilities, it was “a pretty easy decision,” Magro said in his lunch speech. “We just let the facts and the data help us through the selection process.”
Magro said he knew he wanted the headquarters to be close to its customers, and Indiana is ranked in the top five states as a producer of corn and soybeans.
“Being close and being able to get in a pickup truck and talk to your customers—that’s a big deal for us,” he said.
Another big selling point: The company had strong roots in Indianapolis, set up in 1989 as a joint venture by drugmaker Eli Lilly and Co and Dow Chemical to produce agricultural products. In 1997, Dow acquired full ownership and renamed the operation Dow AgroSciences.
The operation, based on Zionsville Road on the city’s northwest side, features 14 buildings, 42 greenhouses and dozens of labs where workers devise new products to help farmers increase yield and control insects, fungus and unwanted vegetation.
The Zionsville Road campus contains some of Corteva’s biggest science and technology assets and workforce.
“We don’t do a lot of research in Wilmington,” Magro said. “We have great corporate services in Wilmington, but not a lot of research.”
Those facts, combined with Indiana’s low cost of living and diverse neighborhoods, cinched the deal. The whole process took between six and nine months.
Magro moved to Carmel from Canada about two years ago. About half of the company’s leadership team has since relocated to central Indiana.
The company has about 21,000 employees, including about 2,000 in Indiana. It operates in about 120 countries.
“And it’s never an easy decision,” Magro said. “But the data really drew us here. And I’d say we couldn’t be more pleased with our decision.”
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Great story. Short, sweet and to the point.
Not to mention, Delaware is the biggest tax haven state in the country, with 68% of Fortune 500 companies organized in the state.
They are incorporated there, but most have their headquarters elsewhere.
Great decision!!
Delaware is the state of incorporation for the 68% of Fortune 500 companies because it has corporate laws and chancery courts specific for businesses unlike most states. Other states have imitated recently but Delaware has had a decades headstart on those companies.
Delaware is not really a tax haven since being incorporated there does not mean that you avoid taxes in the other states and countries that you have facilities and do business in.
Taxes are not the reason most companies incorporate in Delaware, though it has some influence. As noted, most companies incorporated have their headquarters elsewhere, and the headquarters state will usually impose taxes of some sort.
The reason to incorporate in Delaware is a statutory and legal system that is friendly to corporations, and a special set of courts (the Chancery Courts) that focus on corporate legal issues. Judges that understand corporate law and corporate lawsuits are very attractive to large corporations, who often struggle to explain corporate law to former family law and criminal court lawyers who are now judges.
Thank you for this background.
Excellent info. Thank you. Any clue why no other States have figured this out and followed suit?