Dow, DuPont to merge and split, say reports

The Wall Street Journal reported the merger talks earlier. A deal hasn’t yet been inked and the talks could fall apart, the people cautioned.

The two companies, as of Wednesday, had a combined market value of more than $130 billion. He has projected cuts to DuPont headquarters and finance staff, but praised the company’s research and global sales operations.

Breen took over after his predecessor and company veteran Ellen Kullman resigned abruptly in October.

DuPont has struggled with lower growth and reduced profitability in recent years.

Syngenta shares rose as much as 3.1 percent and were trading 2.3 percent higher to $332.2 per share in Zurich. It blamed the strengthening of the United States dollar against currencies in emerging markets, particularly the Brazilian real.

“For the last 10 years, the companies have not truly been competitors”, said Jonas Oxgaard, an analyst with Sanford C. Bernstein. Also, DuPont had moved significantly away from chemicals when it spun-off the Chemours business earlier this year.

Andrew Liveris the CEO as Dow and Edward Breen the DuPont CEO would hold the top two jobs in the new company one person close to the situation said. Performance Materials sales fell 13% to just over $4bn (£2.7bn), with operating profit down 1% to $935m (£622m).

While it made its name in chemicals, DuPont has made big strides on the agriculture side of its business, especially in its corn seed technology.

Meanwhile, Dow Chemical has been jousting with activist investors, too.

Talks between Dow and DuPont are at a late stage and it appeared unlikely a competitor would swoop in with a counter bid. First, it added new members to its board of directors.

Last week Dow sold off one of its line of herbicides to Gowan Company, including a number of chemical trademarks and a production facility in Canada, for an undisclosed sum.

Darwin-born Mr Liveris is a 39-year veteran of Dow and its current chairman and chief executive.

At 12:26 p.m. ET (1727 GMT) the Dow Jones industrial average was down 71.42 points, or 0.41 percent, at 17,496.58, the S&P 500 was down 15.02 points, or 0.73 percent, at 2,048.57 and the Nasdaq Composite was down 68.58 points, or 1.35 percent, at 5,029.67. But the reports have interesting details on what the merged companies would look like and who would be in charge.

Investors cheered the prospect of a merger of Dow Chemical and DuPont, which are reportedly weighing plans for a massive combination followed quickly by a split into three companies. Last month, people with knowledge of the matter said China National Chemical Corp. was initially rebuffed in an approach to buy the world’s biggest producer of pesticides in what would be the largest acquisition ever by a Chinese company. Post-merger, the two will emerge as the biggest agrochemical company in the world, beating smaller, but stronger, Syngenta AG (NYSE:SYT) and Monsanto Company (NYSE:MON). Both companies had confirmed that they were considering deals for those businesses.

In weighing a break-up of the combined Dow and DuPont, the two companies are following a path that both Pfizer and Anheuser-Busch InBev have embarked on.