Under the terms being discussed, a merger of the two companies, each with a market value of roughly $60 billion, could eventually be followed by a breakup of the company, two of these people said. Last month, people with knowledge of the matter said China National Chemical Corp. was initially rebuffed in an approach to buy the world’s biggest producer of pesticides in what would be the largest acquisition ever by a Chinese company. Total cost savings may be $3 billion to $4 billion, he said.
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“We’re still in pretty good shape for a Fed rate hike next week”.
The deal, which Reuters sources and other media said would be presented as a “merger of equals”, would value DuPont’s stock at as much as $82 and Dow’s at as much as $68, trading firm Dragonfly Capital founder Greg Harmon said. The athletic-apparel company said adjusted earnings per share were $0.35, versus $0.37 estimated.
Neither company would comment on the talks and the deal is by no means final.
The American Farm Bureau Federation (AFBF) expressed concerns about consolidation when farm profits have plunged to the lowest since 2002.
Dow and DuPont are said to be in late-stage merger talks under pressure from activist investors over a deal that would be the industry’s largest-ever merger and the latest mega-deal in a year of blockbuster tie-ups from pharmaceuticals and drug stores to beer.
In November there was talk in mid-November that Monsanto might come back to bid on Syngenta again, even though it’s last bid of $46 billion was rebuffed.
“This will include the structural aspects of the many joint ventures and partially owned companies of Dow and DuPont with others, as well as the impact that other previous transactions, such as the divestitures by Dow and the tax free spin-off of Chemours by DuPont, will have”, Young said. Such a plan would enable each entity to find synergies before being broken up to emerge later as more focused businesses.
In 2006, DuPont’s agricultural unit was its fourth-biggest business by operating income. Combined, they would hold 41 percent of the USA corn seed business and 38 percent of the soybean market. “Despite DuPont’s maneuvers to pass these liabilities to Chemours, if the merger proceeds, Dow and DuPont may ultimately be responsible for these claims”.
Both companies are USA institutions. The DuPont Co. was founded in 1802 by French immigrant E.I. DuPont, who established a gunpowder manufacturing operation along the Brandywine River in Wilmington. Midland, Mich.-based Dow was founded by electrochemical pioneer Herbert Henry Dow in 1897.
Gold, steel, railroad, and natural gas also ended the day notably higher, regaining some ground following recent weakness. Dow, meanwhile, has gotten out of selling materials like chlorine and the epoxy used in everything from space travel to Ziploc bags.
Breen, who has vowed to “aggressively” review DuPont’s spending, began restructuring certain DuPont divisions while he was still interim CEO this fall.
Peltz lost a proxy battle for DuPont’s board seats in May, but Chief Executive Ellen Kullman stepped down in October, having lost the confidence of the company’s shareholders. Yahoo (YHOO) also is tussling with activists over a potential major spin-off.
Investors sent the Dow Jones industrial average up 200 points in morning, then began dumping some big tech stocks. With a truce between Loeb and Dow set to expire shortly, Chairman and CEO Andrew Liveris has been talking about the company’s long-term strategy with key portfolio managers.
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“Suppliers, customers and companies wanting to enter the market area are all facing a different set of competitors, with different assets and different incentives”, Grunes said. While Dow was rocked by the financial crisis and a deal at that time that almost sunk the company, his strategy to realign the company’s products has returned the stock to near all-time highs.
