Dow Chemical, DuPont agree to merge
Billed as a “merger of equals”, the agreement calls for the two chemical suppliers to combine as DowDuPont, then separate into three independent publicly traded companies.
U.S. chemical suppliers DuPont Co. and Dow Chemical Co. have agreed to merge, fusing two giants into a single mega-company worth about US$130 billion.
Dow’s CEO Andrew Liveris will be executive chairman of the new company, with DuPont CEO Edward Breen keeping the CEO title upon completion of the deal, which the companies billed as a merger of equals. The new company, called DowDuPont, will have dual headquarters in Midland, Mich., and Wilmington, Del.
The all-stock merger calls for the two companies to combine, and then separate into three independent publicly traded companies focused on material science, agriculture, and specialty products. The proposed material science company would combine DuPont’s performance materials segment with Dow’s performance plastics, performance materials and chemicals, infrastructure solutions, and consumer solutions units, excluding its electronic materials business. The proposed agriculture business would combine DuPont’s and Dow’s seed and crop protection businesses. And the proposed specialty products company would combine DuPont’s nutrition and health, industrial biosciences, safety and protection, and electronics and communications segments with Dow’s electronic materials business.
Dow and DuPont shareholders will each own about 50 per cent of DowDuPont.
“This transaction is a game-changer for our industry and reflects the culmination of a vision we have had for more than a decade to bring together these two powerful innovation and material science leaders,” Liveris said in a statement.
The merger is expected to result in major job cuts, as DuPont has said it will shed about 10 per cent of its global workforce in its restructuring ahead of the deal. Further reductions are also likely, the company said.
The companies expect the merger, which must be approved by regulators and both companies’ shareholders, to be completed by the second half of 2016.