The Firms Behind The Creation Of A $130B Chemical Giant

The new group will be split into three separate entities: agriculture, specialty chemicals and materials, they said.

Edward Breen, chairman and CEO of DuPont and Andrew Liveris, president, chairman and CEO of Dow. “We believe this is the right way”. DowDuPont will claim both Dow’s Midland, Mich., base and DuPont’s Wilmington, Del., location as dual headquarters, and create a 16-person board with eight directors coming from each side.

Until the three firms are spun off, Liveris will have oversight over the businesses designated for the materials unit, while Breen will be responsible for agriculture and specialty products.

Strategic investors – companies buying another generally for business growth purposes – were the most frequent deal-makers in large corporate acquisitions, the PetskyPrunier report said. By 2008, the ag unit was the company’s largest business segment, and it has been a perennial earnings leader in recent years. The agreement will lead to $3 billion in cost savings, the companies said.

USA antitrust enforcers will not look at the deal as simply a combination of two conglomerates but examine their many products to determine where competition will be lost. “And I think we know what some of our weaknesses are and we know what our strengths are”. Dow was formed in 1897 and DuPont was formed in 1802. DuPont said in a separate statement it plans its own round of efficiencies next year that include cutting 10% of a workforce that numbers about 63,000. Further reductions are likely as the combined company streamlines ahead of its planned breakup.

The agriculture company would unite DuPont’s and Dow’s seed and crop protection businesses. Shares of Anheuser have risen about 8% since the deal was announced. He recalls the company as being stable at the time, but not growing very quickly.

A deal would be one of the biggest in a year marked by big deals. M&A activity in 2015 hit a record $4.6 trillion as of Monday, according to Dealogic.

Terms of the deal call for Dow holders to receive one share of the new DowDuPont for each share held, while DuPont holders will receive a fixed exchange ratio of 1.282 shares for each share held.

“That always makes for quicker, easier negotiation”, Mr. Breen said.

In May, DuPont CEO Ellen Kullman won a proxy battle waged by Trian Fund Management, the activist investor co-founded by Nelson Peltz, which said a breakup of the company would save billions of dollars in costs.

“This will create tremendous value for our shareholders and employees”, Liveris said on a conference call.

“The tactical nature of what we could pull off is unbelievable”. If the DowDuPont deal closes first, Dow Corning would join the new company when the subsequent deal wraps up. Not only would the board be split evenly, but shareholders of each company would hold roughly 50 percent of DowDuPont.

Now, Heffron and other leaders at the state business roundtable are on the lookout for new industries to fill any void that DuPont’s transition leaves and shore up what he describes as an unsustainable economy. Presently, both are struggling to compete with their agriculture divisions, which DuPont was even considering selling.

It was around then that Whiting first heard rumors that Dow might be looking to sell or merge its agricultural business, he says.

The transaction is expected to yield more than $1 billion in additional annual EBITDA at full run-rate synergies.