Dow Chairman and CEO Andrew Liveris will be the company’s executive chairman and DuPont Chairman and CEO Edward Breen will be its CEO. Shareholders of Dow and DuPont will each own around 50 percent of the new enterprise. DowDuPont says it will spin off (tax free!) an agriculture company, a material sciences company and a specialty products company. “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”. As would be expected with the marriage of two such big players, a potential deal would be subject to regulatory approval in many geographic areas.
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DuPont announced a companywide restructuring plan to reduce $700 million in costs that includes employee and contractor layoffs affecting about 10 percent of the company’s workforce.
The companies say the deal will save them at least $3 billion over the first two years of the merger.
The proposed agriculture business would unite DuPont’s and Dow’s seed and crop protection businesses.
Dow Chemical shareholders will get one DowDuPont share for each Dow Chemical share held, while DuPont shareholders will get 1.282 shares in DowDuPont for each DuPont share they own.
The deal and spinoffs will create a new global agriculture giant to compete with Monsanto and others, while the largest business will be the material science company that’ll oversee their massive petrochemicals and plastics segments.
Dow is much stronger in chemicals and plastics, while DuPont is a much larger leader in specialty products.
Dow, meanwhile, said it is taking full ownership of Dow Corning, now a 50-50 joint venture between Dow and Corning. Those businesses had combined sales of about $19 billion previous year, besting the $15 billion that Monsanto took in during that period. This combined industrial business had pro forma revenue of $51 billion in 2014. The specialty products company will focus on electronics, biosciences and nutrition and health.
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DowDuPont’s board is expected to have 16 members, with each company contributing eight directors, the companies said.
