DuPont and Dow to merge

The combined company will be called DowDuPont

DuPont and The Dow Chemical Company have ended speculation by announcing they are to merge and the combined company will be called DowDuPont.

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

Separation of DowDuPont would be expected 18-24 months following the closing of the merger.

They intend to separate DowDuPont into three independent, publicly traded companies through tax-free spin-offs.

Rumours about the merger surfaced earlier this week.

Andrew Liveris, Dow's chairman and CEO described the merger as a ‘game-changer’.

"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.

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

Split into three

The companies will include an agriculture company; a Material Science firm and a Specialty Products business.

The Material Science Company will 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.

Combined pro forma 2014 revenue for Material Science is $51bn.

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

Combined pro forma 2014 revenue for Specialty Products is $13bn.

Merger of equals

Dow and DuPont shareholders will each own 50% of the combined company, on a fully diluted basis, excluding preferred shares.

The transaction is expected to deliver $3bn in cost synergies, with 100% of the run-rate cost synergies achieved within the first 24 months following the transaction closing. Additional upside of $1bn is expected from growth synergies.

Edward Breen, chairman and CEO ofDuPont, said the merger will create near-term value through cost synergies and upside from growth synergies.

“Longer term, the three-way split we intend to pursue is expected to unlock even greater value for shareholders and customers and more opportunity for employees as each business will be a leader in attractive segments where global challenges are driving demand for these businesses' distinctive offerings.”

DuPont is the owner of Danisco’s probiotics, enzymes, sweeteners, colours and flavours business, along with the Solae soy brand. DuPont paid $6.3bn (€5.75bn) for Danisco in 2011.

Andrew Liveris will be executive chairman and Edward Breen will be CEO of the combined company.

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

Meanwhile, DuPont has revealed a 2016 plan designed to reduce $700m in costs compared with 2015 including 10% of the firm’s workforce being impacted. 

As a result, it expects to record a pre-tax charge to earnings of $780m, consisting of $650m of employee separation costs and about $130m of asset-related charges and contract terminations.

Related News

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

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

Voxpop: Reaction to Dow, DuPont merger

Voxpop: Reaction to Dow, DuPont merger

BAX System X5 PCR Assay for L. monocytogenes

Method extension for second DuPont X5 PCR assay

Image: iStock

Looking back at 2015: an ‘interesting year,’ says ISR president

Image: iStock

Survey: M&A drivers, inhibitors in 2016

ADM HQ, Decatur, Illinois

DuPont and ADM to build demo plant for producing FDME from fructose

DuPont BAX System X5 Listeria

DuPont Listeria assay backed by AOAC

'We need to make sure that we talk to them eye to eye and not come across as the big global player.'

DuPont nutrition & health chief: We want to work with start-ups

Dow and DuPont both have a portfolio of herbicides for crops for cereals, beets and oil seed rape.

EU Commission raises concerns over Dow DuPont merger

Hygiena’s BAX-X5. Picture: Hygiena.

Hygiena completes acquisition of DuPont Diagnostics


Synlogic takeover secures Mirna’s NASDAQ listing + $40m cash

DuPont produces herbicides for cereals. Picture: DuPont.

European Commission clears Dow/DuPont merger, subject to conditions

DuPont Bynel coextrudable adhesive resin. Picture: DuPont.

Dow/DuPont to divest plastics business amid price hike fears

DuPont BAX System Q7

Thermo Fisher and DuPont extend distribution agreement

DuPont to merge with Dow? Divisions to split?

DuPont to merge with Dow? Divisions to split?

DuPont’s BAX System X5 PCR Assay for Salmonella

Method extension for DuPont’s BAX System X5 PCR Assay for Salmonella

DuPont's Bax system

DuPont Diagnostics names VWR as exclusive US distributor

Picture: DuPont

DuPont signs agreement with Eurofins on food protection service

Dow AOS Certified Technology for pathogen control

Dow touts ozone tech

Dow forms agreement with Xgenex

Dow expands sales base for sanitization system

Submit a comment

Your comment has been saved

Post a comment

Please note that any information that you supply is protected by our Privacy and Cookie Policy. Access to all documents and request for further information are available to all users at no costs, In order to provide you with this free service, William Reed Business Media SAS does share your information with companies that have content on this site. When you access a document or request further information from this site, your information maybe shared with the owners of that document or information.