DuPont, DuPont seek merger, then 3-way split

“For DuPont, this is a definitive leap forward on our path to higher growth and higher value”.

Now the corporations estimate that the proposed plan will result in cost synergies, mostly in agriculture, of $3 billion, resulting in an additional $30 billion of market value, at a cost of about $4 billion.

Analysts have said a Dow-DuPont tie-up might push Monsanto Co to take another shot at Syngenta after the USA company abandoned a $45 billion offer for the Swiss company in August.

The merger calls for Dow Chemical stockholders to receive one share of the company for each share they now own, while DuPont holders would exchange each of their shares for 1.282 shares of DowDuPont. About half of that growth is expected in the agriculture business, Fitterling said.

The companies aim to achieve the split into three within two years of the completion of the merger. They both have such a heavy focus on innovation.

Fitterling said bringing the two companies together in this area will provide the scale needed to succeed. One would be an agricultural company with an estimated revenue of $19 billion, while the other two would concentrate on material science with $51 billion in revenue and specialty products with 13 billion in revenue. On a pro-forma basis, their combined revenue would be $83 billion, according to a presentation Friday. “We don’t see much real significant overlap here, which is pretty incredible”, he said, adding that the combined ag business would be balanced between seeds and crop protection.

Advisory committees will will established for each of those businesses.

After the merger, the company plans to divide into separate entities.

The new company’s board will have 16 directors, consisting of eight current DuPont directors and eight current Dow directors, and two independent co-lead directors. In addition, when named, the chief financial officer will report to Breen. The new company will have a market capitalization of around $130 billion.

The combined company, to be called DowDuPont, aims to break into three publicly traded companies within two years of closing the merger. The three companies would be a global agriculture company that would include DuPont Pioneer and Dow AgroSciences, L.L.C., a specialty products company that would include DuPont Nutrition & Health, and a global material science company.

It’s been a bumpy 2015 for DuPont, whose legacy reaches back to 1802 when E. I. du Pont built a series of gunpowder mills along the banks of the Brandywine River near Wilmington, Del., where the company is still based. For those unable to listen to the live broadcast, a replay will be available on both websites.

Hanging over both companies had been bruising fights with prominent activist investors.

In a statement today, DuPont said the transaction simplifies the companies structure because it will operate fewer, but larger business units rather than several smaller segments.