DuPont and Dow have major footprints all across this region, from DE to New Jersey to Philadelphia to its suburbs The merger would combine two companies that sell agricultural products to millions of farmers around the world, and make a variety of chemicals for consumer and industrial products ranging from electronics, automobiles, and household goods to building materials and safety equipment.
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The two companies, will first form DowDuPont, then separate into three independent companies focused on agriculture, material science and specialty products.
“I have also coveted the transaction”, said Breen.
Shares of Dow Chemical and DuPont climbed amid reports that the two chemical giants are in advanced merger discussions.
Similarly, Dow CEO Andrew Liveris told analysts in October that there were “potential synergies in a newly consolidating agricultural market” regarding Dow AgroSciences.
The three-way split into material sciences, specialty products, and seeds and agrichemicals, is likely to occur 18 to 24 months after the merger deal closes.
The company was thinking more in terms of surgical stockings when it described “a garment made of yarns having high tenacity and high stretch”, exerting “substantial pressure upon the body of the wearer”, but the public soon had other ideas. The three companies will focus on agriculture, materials, and specialty products. Because the firms are of similar value, the transaction will be a merger of equals, with shareholders of each company getting shares of the new DowDuPont. “We can sit around, wring our hands and bemoan the hand that DE has been dealt – or we can roll up our sleeves, join hands and get to work finding the opportunity within this perceived adversity”, said Sen.
The merger-split promises to have a large impact on corresponding industries and will likely please activist investors who have spent years pushing for conglomerates to be broken up. As well as the $3 billion of cost savings, the companies said the deal will create additional earnings of about $1 billion.
Following the closing of the transaction, DowDuPont will be dual headquartered in Midland, Michigan and Wilmington, Delaware.
The deal, which the companies expect to close in the second half of 2016, is sure to be scrutinized by antitrust regulators.
Robb believes it would be best if no jobs were lost, but history shows that there are usually job casualties when two companies become one. (DOW) announced that it is purchasing the remaining stake in their joint venture, Dow Corning.
The merger, one of the biggest of the year, would allow Dow and DuPont to rejig assets based on the diverging fortunes of their businesses. This company’s combined 2014 revenue was about $51 billion on an adjusted basis.
DuPont’s agriculture business accounted for $9.2 billion of revenue in the first nine months of 2015, or 41 percent of total sales, according to data compiled by Bloomberg.
The companies said the proposed merger will result in cost synergies of about $3 billion. Combined pro forma 2014 revenue for Agriculture is about $19 billion. Together, their complementary offerings create a new global leader in Electronics Products, and each business will benefit from more targeted investment in their productive technology development and innovation capabilities. The board of the new company would have 16 directors, evenly divided between current Dow and DuPont directors.
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What has been rumored is now reality, DOW and DuPont are merging in one of the biggest mergers in the nation’s history.
