More details about Dow, DuPont merger revealed
BUSINESS RECORD STAFF Dec 11, 2015 | 8:51 pm
1 min read time
297 wordsAll Latest News, Energy, Retail and BusinessDow Chemical Co. and DuPont Co., parent of Johnston-based DuPont Pioneer, have approved a $130 billion merger of equals.
The Wall Street Journal reported that the companies plan to cut costs by about $3 billion as they prepare to combine operations in three spinoff businesses. Those actions over the next 18 to 24 months appear to have DuPont Pioneer, one of Greater Des Moines’ biggest employers, headed to a new $19 billion DowDuPont agriculture company.
The other two spinoffs will focus on material sciences and specialty products.
Dow CEO Andrew Liveris will be executive chairman of the new company, with DuPont Chief Executive Edward Breen — known as a breakup artist — keeping the CEO title should the deal clear regulators’ approval regarding questions of antitrust.
In a statement, Breen said a new DowDuPont ag company would have little overlap. “It give the end-consumer, our farmer, a lot of product choice, a diversity of choice,” he said.
DowDuPont would have dual headquarters in Midland, Mich., and Wilmington, Del.
“The merger puts together a company that is strong on the seed side with Pioneer and strong on the chemical side with Dow,” Chad Hart, an Iowa State University agricultural economist, told The Des Moines Register. “Fertilizer might be the only thing that they’re not covering when you look across the products they would offer.”
DuPont shares fell 5.1 percent in midday trading in New York as it also announced restructuring plans and gave downbeat comments on its 2016 sales growth. Dow shares slid 3.1 percent. Shares in both companies had risen since The Wall Street Journal reported on Tuesday that they were in merger talks.
DuPont already had planned to cut 10 percent of its global workforce. More cuts are expected in preparation for the merger, The Wall Street Journal reported.
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