DuPont chief executive Ed Breen will be CEO of the new company, while Dow Chemical boss Andrew Liveris will be executive chairman.
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DuPont, formally E.I. du Pont de Nemours & Co., is a Wilmington, Del.-based company that had 2014 revenue of $34.7 billion and employs about 63,000.
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The all-stock merger of equals combines two of corporate America’s oldest institutions and would be a prelude to a split into three publicly traded businesses, focusing on agriculture, materials and specialty products.
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The material science company would consist of DuPont’s Performance Materials segment as well as Dow’s Performance Plastics, Performance Materials and Chemicals, Infrastructure Solutions and Consumer solutions (excluding the Dow Electronic Materials business) operating segments.
The Dow Chemical Company and DuPont have announced the details of a massive merger after a series of meetings. Dow’s corn-seed sales likely will be divested for antitrust reasons, potentially to Syngenta, while DuPont’s nutrition and health and industrial biosciences units could stay within the new agriculture division, the analysts said. The most recent change in the Dow came when Apple took the place of AT&T, which could imply another tech company filling DuPont’s spot, if it continues to go in that direction.
The companies said the merger would mean “run-rate cost synergies of approximately $3 billion, which are projected to create approximately $30 billion of market value”.
Before the amalgamation, DuPont said it’ll lose $700 million in prices, with about 10% of its worldwide work force “affected”, according to a statement.
Current shareholders of Dow are expected to receive one share of the new company for each of their current shares in Dow. As a result, they restructured their product portfolios and divested many businesses over the last few years. Shares of The Dow Chemical Co. rose 12 percent to close at 56.97. The three companies will focus on agriculture, materials, and specialty products.
Potential tax savings were one reason for the complicated merger-before-breakup deal, analysts said.
DOW Chemical and the DuPont have announced that they are merging in a $US130 billion (178 billion) chemical industry megadeal.
Dow said it is taking full ownership of Dow Corning, now a 50-50 joint venture between Dow and Corning.
The companies expect to find about $1.5 billion in cost synergies in the material science area.
It appears that all packaging business will be conducted within the Material Science Company. And a new specialty products company, with combined revenues of $13 billion.
He will be executive chairman of the new company, with DuPont Chief Executive Edward Breen keeping the CEO title upon consummation of a deal, anticipated by late next year. As the third and fourth largest chemical companies in the world, and the two biggest in the USA, claims of monopoly will abound.
“When I look at DuPont and Dow, I see businesses that fit together like hand and glove”, Breen said.
Dow Chemical and DuPont have officially announced they will merge after a series of meetings.
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The merger, which the release states is expected to be complete in the second half of 2016, will result in a combined company called DowDuPont.
