Dow, DuPont attempt merger that would form $130B chemical colossus

DOVER, Del. -- Dow Chemical and the DuPont Co. announced Friday that they are merging in a $130 billion chemical industry megadeal.

See Full Article

The merger would combine two companies that sell agricultural products to millions of farmers around the world, and make a variety of chemicals for consumer and industrial products ranging from electronics, automobiles, and household goods to building materials and safety equipment.

The all-stock merger calls for the two companies to combine as DowDuPont, then separate into three independent publicly traded companies focused on agriculture, material science and specialty products.

"Over the last decade our entire industry has experienced tectonic shifts as an evolving world presented complex challenges and opportunities," said Dow Chairman and CEO Andrew Liveris.

Liveris will be named executive chairman of the combined company while DuPont Chairman and CEO Edward Breen will be CEO. The company will have dual headquarters in Michigan and Delaware where the two companies are currently based.

In conjunction with the proposed merger, which is subject to regulatory approval, both companies are taking separate restructuring steps.

DuPont announced a companywide restructuring plan to reduce $700 million in costs that includes employee and contractor layoffs affecting about 10 per cent of the company's workforce. It expects to record a pretax charge of about $780 million, with approximately $650 million of employee separation costs and about $130 million of asset-related charges and contract terminations.

Dow, meanwhile, said it is taking full ownership of Dow Corning, currently a 50-50 joint venture between Dow and Corning. Dow said the move, expected to close in the first half of 2016, is expected to generate more than $1 billion in additional adjusted annual earnings and will increase its product offerings in the building and construction, consumer care, and automotive markets.

The companies said the proposed merger of equals, approved unanimously by their respective directors, will result in cost synergies of about $3 billion that are projected to create approximately $30 billion of market value.

Under the terms of the deal, Dow shareholders will receive a fixed exchange ratio of one share of DowDuPont for each Dow share, and DuPont shareholders will receive a fixed exchange ratio of 1.282 shares in DowDuPont for each DuPont share. Dow and DuPont shareholders will own about 50 per cent, respectively, of the combined company.

The proposed agriculture business would unite DuPont's and Dow's seed and crop protection businesses. The material science company would combine DuPont's performance materials segment with Dow's performance plastics, performance materials and chemicals, infrastructure solutions, and consumer solutions units, excluding its electronic materials business. Combined pro forma 2014 revenue for material science was about $51 billion.

The specialty products company would combine DuPont's nutrition and health, industrial biosciences, safety and protection, and electronics and communications segments with Dow's electronic materials business. Combined pro forma 2014 revenue for specialty products was approximately $13 billion.

The new company's board is expected to have 16 directors, consisting of eight current DuPont directors and eight current Dow directors.



Advertisements

Latest Economic News

  • Trump taps CEOs of 5 job-offshoring firms for input on how to create jobs

    Economic CBC News
    President Donald Trump, who has vowed to stop U.S. manufacturing from disappearing overseas, will seek job-creation advice on Thursday from at least five companies that are laying off thousands of workers as they shift production abroad. Source
  • Loblaw fourth-quarter profit up 57% to $201M

    Economic CBC News
    ?Loblaw had $11.13 billion of revenue and a $201 million net profit in the fourth quarter, according to earnings announced Thursday morning. The profit amounted to 50 cents per share. The net profit was up 57 per cent or $73 million from a year earlier, while revenue was up $265 million or 2.4 per cent. Source
  • Loblaw Q4 profit up 57 per cent to $201M

    Economic CTV News
    BRAMPTON, Ont. -- Loblaw had $11.13 billion of revenue and a $201 million net profit in the fourth quarter. The profit amounted to 50 cents per share. The net profit was up 57 per cent or $73 million from a year earlier, while revenue was up $265 million or 2.4 per cent. Source
  • CIBC grows first-quarter net income to $1.41B

    Economic CBC News
    ?CIBC increased its first-quarter net income to $1.41 billion, up from $982 million a year ago, according to earnings announced Thursday morning. The quarterly earnings amounted to $3.50 per diluted share, compared with $2.43 per diluted share during the same period last year. Source
  • Canadians put less into TFSAs in 2016: survey

    Economic CTV News
    TORONTO - A new survey suggests Canadians contributed less to their tax-free savings accounts last year, mostly because they didn't have enough money to invest. The Bank of Montreal's annual TFSA survey found respondents contributed an average of $4,592 into their accounts last year - $939 less than the year before. Source
  • CIBC grows first quarter net income

    Economic CTV News
    TORONTO - CIBC increased its first-quarter net income to $1.41 billion, up from $982 million a year ago. The quarterly earnings amounted to $3.50 per diluted share, compared with $2.43 per diluted share during the same period last year. Source
  • Attention shoppers: There's a way to get sale items at no cost

    Economic CBC News
    Have you ever bought an item on sale, only to get to the checkout and be charged the full price? Depending on the store and the cost of the item, you could be entitled to get it free under the Scanner Price Accuracy Voluntary Code. Source
  • North Dakota officials beg last pipeline protesters to leave

    Economic CTV News
    CANNON BALL, N.D. - Public officials in North Dakota pleaded with the remaining protesters at the Dakota Access oil pipeline camp to pack up and leave so authorities can resume cleaning up the premises without any further arrests. Source
  • Governor: Dakota Access protesters can leave without arrest

    Economic CTV News
    CANNON BALL, N.D. -- A few dozen people still occupying a sprawling encampment on federal land to protest construction of the Dakota Access oil pipeline will have another chance to leave peacefully Thursday, North Dakota's governor said, after public officials pleaded with the self-named "water protectors" to leave so the site can be cleared. Source
  • Asian stocks dip as U.S. rate hike mooted

    Economic CTV News
    HONG KONG - Asian shares slipped Thursday after the latest Fed minutes raised the possibility that a U.S. rate hike could come sooner than expected. KEEPING SCORE: Japan's benchmark Nikkei 225 lost 0.4 per cent to 19,312.07 and South Korea's Kospi dipped 0.1 per cent to 2,104.70. Source