THE QUOTE: “You’ve got two days of massive selling of oil and commodity companies, so perhaps some is oversold”, said Bryn Mawr Trust Chief Investment Officer Ernie Cecilia.
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This year has seen several big mergers and acquisitions, two of which has led to the creation of the largest companies in their respective industries, according to CNN.
Liveris would be executive chairman of the merged company, while DuPont CEO Ed Breen would retain that title, according to one of the people. The companies plan to bill the combined company as only a temporary vehicle to cut costs before splitting, and believe there is minimal antitrust overlap across those businesses.
Insiders stressed, however, that the deal is still in its infancy and talks could still fall apart, reported Bloomberg.
The way anti-trust regulators look at agriculture deals is generally quite complicated, he said.
Dow rallied to a record and DuPont was on track for its biggest daily gain in seven years as investors expressed astonishment at a possible $130 billion combination of the longtime rivals.
Syngenta, the world’s largest agrochemicals company, fended off a $47 billion (31 billion pounds) offer from USA group Monsanto in August and reportedly rejected a $42 billion (28 billion pounds) pursuit by state-owned China National Chemical Corp or ChemChina last month.
That split would probably involve creating a company focused on agricultural products such as crop seeds and pesticides, another focused on speciality chemicals and a third that makes plastics and other commodities, said Mr Hassan Ahmed, a New York-based analyst at Alembic Global Advisors.
DuPont, similarly, faced pressure from Nelson Peltz to separate its agriculture, nutrition and biosciences units from its building and safety materials divisions. The almost $120 billion deal would actually pave the way for a three-way split of the combined companies. He pitched a deal as a way to find synergies before breaking up the businesses into more focused operations, the people said.
In 2006, DuPont’s agricultural unit was its fourth-biggest business by operating income.
CURRENCIES: The dollar fell to 121.36 yen from 121.59 in the previous trading session. DuPont’s stable of goods includes Kevlar fibers and Corian countertops, while Dow’s encompasses Styrofoam insulations and sunscreen chemicals. Benchmark U.S. crude was down 0.3 percent at $37.04 a barrel in electronic trading on the New York Mercantile Exchange, after falling 35 cents to close at $37.16 in New York on Wednesday.
Since it’s founding on the banks of the Brandywine River in Wilmington, DuPont has dominated the DE business scene. We feel its strengths outweigh the fact that the company shows low profit margins.
DuPont has already announced a spin off of its performance chemicals business earlier this year. Monsanto CEO Hugh Grant said last month that “everybody has been talking to everybody” in the industry. On Wednesday, the International Energy Agency’s chief said he expected oil prices to remain low next year.
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“The deal maybe did create euphoria that kept the market up, but it was a false sense of optimism”, Mohit Bajaj, director of ETF trading solutions at broker WallachBeth Capital, said.
