News

Dow, DuPont to merge

14 Dec 2015

DuPont and Dow are to combine into a company named DowDuPont, and will then separate into three independent, publicly traded companies as soon as feasible, which is expected to be 18-24 months.

DuPont and Dow are to combine into a company named DowDuPont, and will then separate into three independent, publicly traded companies as soon as feasible, which is expected to be 18-24 months following the closing of the merger.

The companies will include a pure-play agriculture company; a pure-play material science company; and a specialty products company.

Upon closing of the transaction, the combined company would have a combined market capitalisation of approximately $130 billion at announcement. The transaction is expected to deliver approximately $3 billion in cost synergies.

The agriculture company will unite DuPont’s and Dow’s seed and crop protection businesses. Combined pro forma 2014 revenue for agriculture is approximately $19 billion.

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 approximately $51 billion.

The specialty products company will focus on unique businesses that share similar investment characteristics and specialty market focus. The businesses will include DuPont’s Nutrition & Health, Industrial Biosciences, Safety & Protection and Electronics & Communications, as well as the Dow Electronic Materials business. Combined pro forma 2014 revenue for Specialty Products is approximately $13 billion.

“This transaction is a game-changer for our industry and reflects the culmination of a vision we have had for more than a decade to bring together these two powerful innovation and material science leaders,” said Andrew N. Liveris, Dow’s chairman and chief executive officer. “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 transaction is a major accelerator in Dow’s ongoing transformation, and through this we are creating significant value and three powerful new companies. This merger of equals significantly enhances the growth profile for both companies, while driving value for all of our shareholders and our customers.”

“This is an extraordinary opportunity to deliver long-term, sustainable shareholder value through the combination of two highly complementary global leaders and the creation of three strong, focused, industry-leading businesses. Each of these businesses will be able to allocate capital more effectively, apply its powerful innovation more productively, and extend its value-added products and solutions to more customers worldwide,” said Edward D. Breen, chairman and chief executive officer of DuPont. “For DuPont, this is a definitive leap forward on our path to higher growth and higher value. This merger of equals will create significant near-term value through substantial cost synergies and additional 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.”