That will lead to more scrutiny from anti-trust regulators.
Advertisement
Dow is a relative youngster, launched only in 1897.
One of the state’s largest employers, Dow manufactures a range of products from plastics to paint preservatives, including automotive products. Dow and DuPont are used to doing things their own way for more than a century.
Whiting grew up in Midland, Michigan, wanting to be a chemical engineer like his great-grandfather, the man who founded the company.
It’s been a bumpy 2015 for DuPont, whose legacy reaches back to 1802 when E. I. du Pont built a series of gunpowder mills along the banks of the Brandywine River near Wilmington, Delaware, where the company is still based. It plans to slash about 10 percent of its work force and take a pretax charge of $780 million.
Also, DuPont has a strong presence in crop protection products, Wagner said, but Dow Agro has been a bit stronger recently at developing new crop protection products, such as its Enlist herbicide that started rolling out this year.
As a chemical powerhouse, Dow and DuPont combined would be the second-largest chemical company in terms of revenue after BASF of Germany.
Job reductions are expected to result from the merger. With 7,000 employees here in DE, there will be an impact. Dow has about 53,000 workers.
Company officials pointed to other more general sources of synergy.
DuPont was so entwined with Delaware’s families and fortunes that residents called the company “Uncle Dupey”. “For instance, electronic and display materials is an area where the companies can potentially experience cost benefits and increased market penetration, while other markets such as safety, where Dow is not active, will not see much change”.
“There’s been mergers, companies come, companies go, what this merger will do I don’t know but definitely the downward trend the trend in recent years has been downwards”, former South Charleston mayor Richie Robb said.
The statement added that the transaction was expected to produce run-rate cost synergies of around $3 billion and approximately $1 billion in growth synergies.
The merger will result in a combined market capitalization of $130 billion.
Activist investors have been pressuring both companies to split up to boost their share prices. Dow CEO Andrew Liveris will be the executive chairman of the new company, while his counterpart at DuPont, Edward Breen, will keep the CEO title after the deal closes.
Iowa State University management professor David King says ultimately the proposal calls for then splitting up the behemoth into three distinct companies.
“The tactical nature of what we could pull off is unbelievable. They understand the industrial logic to the deal and they understand the value we’re going to create”.
The dollar value of all deals that were struck worldwide in 2015 so far totals $4.8 trillion, up 30% from past year and exceeding the previous high of $4.6 trillion in 2007, according to data from research firm Dealogic.
Dell’s $66 billion acquisition of EMC Corp.
Mr. Breen told analysts that the three-way breakup would likely be a one-off event, rather than spinning off the units at different times.
One DuPont shareholder described the deal as merely “OK”.
After the merger, the company plans to divide into separate entities.
Advertisement
The transaction, expected to close in the first half of 2016, will help Dow capture $400 million in cost savings from the restructured ownership.
