DuPont and its financial partners may have less to gain from a merger than Dow, analyst Levenson concluded: “DuPont, for all its management turmoil and activist pressure, is a stronger credit than Dow, but any potential lift for Dow bondholders could be wiped out when the company is split up”. Earlier this week, USA and Canadian authorities blocked the merger between Staples and Office Depot on antitrust grounds, as the move would have created a powerful monopoly in the office supplies industry. Sales are expected to drop at a 21.70% rate.
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Delaware-based DuPont and Michigan-based Dow Chemical are both worth about $58 billion. She resigned in October after reporting disappointing sales and earnings, then Breen took the helm.
DuPont has struggled with lower growth and reduced profitability in recent years.
Also rising were shares of Chevron and those of Exxon Mobil, last up 1.9 percent and 1.6 percent respectively, helped by a reprieve in oil prices. It blamed the strengthening of the U.S. dollar against currencies in emerging markets, particularly the Brazilian real. Such investigations can lead to civil cases against companies and their employees, or they can end with no charges, sometimes months or years later.
DuPont has already announced a spin off of its performance chemicals business earlier this year. In addition to agriculture, DuPont’s portfolio includes electronics and communication, advanced materials, and safety and protection. The euro fell to $1.0951 from $1.1023.
In 2006, DuPont’s agricultural unit was its fourth-biggest business by operating income.
“Everyone is talking to everyone”, the boss of Dow told investors in November.
Mr Loeb’s Third Point successfully campaigned to have two directors join the Dow board previous year, after an aggressive public campaign personally vilifying Mr Liveris and seeking a breakup of the chemical firm.
This actually isn’t the first report that DuPont and Dow Chemical are considering their strategic options.
Under pressure from shareholders to slim down and focus on faster-growing units, both companies have been restructuring their businesses by shedding some of the products that made them famous. But the reports have interesting details on what the merged companies would look like and who would be in charge.
Investors bailed out of TCP International (NYSE:TCPI), however, as Lundin Law launched a class action lawsuit against the company, which last month saw its shares slump after an audit committee investigation into its accounts.
Both are major players in commodity resins, to be sure, although DuPont’s plastics portfolio is heavy on engineering materials like nylon and specialty polyesters, while Dow is better known for commodity resins including polyethylene.
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Adding DuPont’s relatively modest USA ethylene-processing capacity to Dow’s would raise the combined entity’s annual capacity to 10.3 billion pounds a year from Dow’s current 9 billion, and represent about 15% of the national total, Mr. Young said. “Over the last decade our entire industry has experienced tectonic shifts as an evolving world presented complex challenges and opportunities – requiring each company to exercise foresight, agility and focus on execution”.
