DuPont, Dow merger – ‘likely to be one of the biggest M&A transactions of 2016’

Breen (left) chairman/CEO, DuPont, and Liveris, president, chairman, CEO, Dow.

DuPont and The Dow Chemical Company announced they will merge to become DowDuPont last week – if the deal goes ahead it is ‘likely to be one of the biggest M&A transactions of 2016’, according to Moorgate Capital.

The transaction is expected to close in the second half of 2016, subject to closing conditions, including regulatory approvals, and approval by shareholders.

2015 - biggest year ever for global M&A activity

Nick Mockett, head of Packaging M&A, Moorgate Capital, told BeverageDaily, $130bn mergers don’t happen every day, particularly in the plastics and packaging supply chain.

If this deal passes the hurdles, such as antitrust, it is likely to be one of the biggest M&A transactions of 2016,” he said.

For manufacturers of plastic packaging it means a more concentrated supplier base. However, if the merged entity is able to exploit synergies and efficiencies it may be able to pass on benefits to customers.

“2015 has been the biggest year ever for global M&A activity, surpassing even 2007 and large transactions such as this usually cause a wave of follow on transactions as competitors follow suit.”

DowDuPont will be separated into three independent, publicly traded companies; an agriculture company; Material Science firm and Specialty Products.

Headquartered in Midland, Michigan & Wilmington, Delaware

The Material Science Company will consist of DuPont's Performance Materials, Dow’s Performance Plastics, Performance Materials and Chemicals, Infrastructure Solutions, and Consumer Solutions (excluding the Dow Electronic Materials business) operating segments.

The Specialty Products Company will include DuPont's Nutrition & Health, Industrial Biosciences, Safety & Protection and Dow Electronic Materials business.

Andrew Liveris, Dow's chairman and CEO will become executive chairman and Edward Breen, chairman and CEO of DuPont will be CEO of the combined 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,” said Liveris.

This merger of equals significantly enhances the growth profile for both companies, while driving value for all of our shareholders and our customers.”

DowDuPont will be dual headquartered in Midland, Michigan and Wilmington, Delaware.  

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