Initially DuPont and Dow will merge its agriculture, material science and specialty products businesses and subsequently pursue a tax-free spin-off into three independent, publicly traded companies in 18-24 months after closing of the merger.
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In addition, the Wilmington News Journal reports that a yet unnamed specialty products company will also locate its headquarters in the DE town. The new company will retain strong presences in Johnston, Iowa, where DuPont Pioneer is situated, as well as Indianapolis, Indiana, home to Dow Agrosciences.
Markell called Friday’s announcement, “very positive”, saying it is good news for a state that is reeling from DuPont eliminating 1,700 jobs in the state, or about 28 percent of its workforce.
Dow Chemical and DuPont chose DE over IN and Iowa as the home of their combined agriculture headquarters.
“The proposed combination of Dow’s and DuPont’s agricultural businesses will create a U.S.-based global leader with the scale and breadth necessary to deliver greater value and choice for growers worldwide and compete against the largest global competitors”, said Andrew N. Liveris, chairman and chief executive officer of Dow. In a release announcing this strategy, Edward D. Breen, chairman and CEO of DuPont comments: “This efficient structure takes full advantage of the unique expertise and resources that exist in each location, enabling us to deliver the long-term opportunity for the leading global Agriculture company we intend to create”.
Breen notes that this announcement is “another step toward our creation of a leading global agriculture company”.
“Dow and DuPont have played integral roles in shaping the success of Indiana’s economy, and we are proud that in will play a key role in their new future”, said Gov. Mike Pence in a statement. McKinney added company officials were impressed with Indiana’s pro-agriculture philosophy and business-friendly tax structure.
The agricultural chemicals arm of the post-merger DowDuPont company will stay in Delaware. But in a recent earnings call, Dow executives said they plan to trim 500 jobs in Dow, declining to say where those cuts would come from.
The material science company will have Dow in it’s official name and will be operating out of Midland, Michigan.
Iowa was passed up as the location for the headquarters of the newly formed DowDuPont.
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The merger could be complete in the second half of the year, at which point, the scope of the new ag company and the work force in Indianapolis will become more clear.
