DuPont jumped 11.8 percent and Dow Chemical 10.8 percent on prospects of their combining into the world’s biggest chemical company, with annual sales totalling more than $90 billion. “A discussion of the merger of the two companies would probably not have happened if the change in the CEO of DuPont had not happened”, he said.
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According to their reports, the talks were at an advanced stage and a deal could be announced this week, although there was no guarantee that a tie-up would be agreed. More than $4 trillion worth of deals have been since struck the beginning of this year, surpassing 2007 as the busiest year for acquisitions. Suppliers of raw materials bucked the move lower with sharp gains. “The rumored merger and split with Dow Chemical is a continuation of DuPont’s pattern of throwing up roadblocks to justice for C-8 victims”.
News of a potential deal raises questions for the residents of Midland, Michigan, the small city where Dow has been headquartered since the late 1800s. Such a plan would enable each entity to find synergies before being broken up to emerge later as more focused businesses. But both men can count on support from mutual funds and midsize investment firms run by managers who want DuPont and Dow shares to rise fast, instead of waiting for research and development visions that might or might not lead to profits years ahead. Liveris came under attack previous year from the activist investor, which had acquired a 2 percent stake in Dow. Monsanto is the leader in seeds with a 26 percent market share, followed by Dupont Pioneer’s 21 percent.
Sealed Air Corp., which produces plastic wrap and plastic packaging for the food industry, is a large-volume buyer of resins from Dow, but has scaled back its business with DuPont.
The news boosted stocks of both companies, which jumped as much as 12 per cent on Wednesday. DuPont was founded in 1802 by French immigrant E.I. DuPont, who established a gunpowder manufacturing operation along the Brandywine River in Wilmington, Del.
Based on sales, Performance Materials ranked second among DuPont’s six operating units in the nine-month period.
Dow Chief Executive Andrew Liveris said as recently as October that his company was not in the market for “big M&A”.
DuPont – one of the world’s largest plastics and chemicals makers – continues to deal with the fallout of a lengthy proxy war with activist investor Trian Fund Management and its founder Nelson Peltz. At midday, it was at $73.72, up 10.6 per cent.
“Monsanto could launch a takeover offer at any point” for the Swiss company, Martin Schreiber, analyst at Zuercher Kantonalbank, said in an email.
“Everyone is talking to everyone”, the boss of Dow told investors in November.
In Mr Nuttall’s view, oil stocks are “very mispriced” looking at the coming year.
iShares Dow Jones US Basic Mater.
SEOUL, South Korea (AP) – Asian stock markets were mostly weaker on Thursday after Wall Street fell for a third day and New Zealand’s central bank signaled it had finished cutting interest rates.
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DuPont and Dow Chemical shares surged in early trade Wednesday on news of talks on a possible mega-merger, lifting the Dow and the S&P 500. While Dow was rocked by the financial crisis and a deal at that time that almost sunk the company, his strategy to realign the company’s products has returned the stock to near all-time highs.
