The plan is to spin off Incitec Pivot Fertilisers into a new company focused on selling soil health products to East Coast Australian farmers.
The existing corporation will be rebranded as Dyno Nobel, taking the name of a subsidiary founded by dynamite inventor Alfred Nobel in 1865.
IPL acquired the industrial and mining explosives company in 2008 for $3.3 billion because both explosives and fertiliser is manufactured using ammonia nitrate, but it now says the combination offers declining synergies, as its customers require "specialised and differing solutions".
"The board sees significant value enhancement through the separation of two leading businesses and brands in Dyno Nobel and Incitec Pivot Fertilisers," said IPL chairman Brian Kruger.
"Our explosives and fertilisers businesses will continue to provide attractive exposure to the essential minerals and agriculture industries that are underpinned by important global megatrends."
IPL shareholders will receive shares in the new fertiliser company equivalent to their existing shareholding, if they approve the plan, likely in the first half of 2023.
IPL's explosives business had $3 billion in revenue and $559 million in operating earnings in the 12 months to March 31, while its fertiliser division had $2.2 billion in revenue and $505 million in earnings.
The existing ASX100 company has a market cap of $7.2 billion and more than 5,000 employees.
At 1317, Incitec Pivot shares were down 3.9 per cent to $3.595.
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