from the better-living-through-chemicals dept.
Dow Chemical Company and DuPont have agreed to merge into an entity named DowDuPont, before splitting into three distinct companies organized by market segment:
The two largest chemical companies in America will become one entity named DowDuPont, as Dow Chemical and DuPont say they're joining in a "merger of equals." The new company will have a market capitalization of around $130 billion. After the merger, the resulting behemoth would be split into what Dow Chairman and CEO Andrew Liveris calls "three powerful new companies," with a combined revenue of around $83 billion.
Now that the two companies' boards of directors have agreed to terms, their shareholders will also need to affirm the merger. Terms of the agreement state that Dow shareholders will get 1 share of the new enterprise for each Dow share they own, while DuPont shareholders will get 1.28 shares. They will own about 50 percent of the new enterprise.
The massive deal also will need the approval of federal regulators. The deal is expected to close in the second half of 2016, with the segmentation taking place up to two years later. The three corporations will have distinct identities, according to a news release announcing the merger. Here's a list of relevant quotes, along with the projected revenue for each proposed company:
- Agriculture: "Leading global pure-play agriculture company that unites DuPont's and Dow's seed and crop protection businesses." Revenue: $19 billion.
- Material Science: "A pure-play industrial leader, consisting of DuPont's Performance Materials segment, as well as Dow's Performance Plastics, Performance Materials and Chemicals, Infrastructure Solutions, and Consumer Solutions ... operating segments." Revenue: $51 billion.
- Specialty Products: "The businesses will include DuPont's Nutrition & Health, Industrial Biosciences, Safety & Protection and Electronics & Communications, as well as the Dow Electronic Materials business." Revenue: $13 billion.
The companies hope to save $3 billion during the merger period and DuPont already plans to cut around 10% of staff. Dow will also purchase glassmaker Corning's 50% stake in the Dow Corning joint venture. Reuters reports that the merger may spur other deals, such as another attempt by Monsanto to purchase Syngenta. We've had a lot of merger news lately but this one will still rank among the twenty biggest ever.
How about some Teflon to cleanse this news from your mind?
Related Stories
In recent years, Monsanto has tried to purchase the Swiss agricultural chemical giant Syngenta AG. Less than 6 months ago, Syngenta rejected a $47 billion takeover offer (with a $3 billion reverse break-up fee) from Monsanto.
Now Syngenta has agreed to a $43 billion cash buyout by the Chinese government-owned China National Chemical Corporation (ChemChina). The deal would be the largest foreign acquisition ever by a Chinese company:
The offer comes after months of uncertainty over the future of Syngenta, which was earlier pursued by U.S. seed giant Monsanto Co. To seal the deal, the companies must now overcome potentially fraught regulatory hurdles in the U.S. and elsewhere.
If completed, the purchase would mark a fresh high for Chinese overseas acquisitions. Chinese companies — with the strong support of their government — have sought to gain technology and know-how from abroad, while also opening up new markets to drive sales overseas as demand at home slows.
For Syngenta, the deal holds the prospect of new capital and greater access to the huge China market, while for ChemChina, it gives the company access to Syngenta's advanced biotechnology for developing seeds.
Previously: Dow and DuPont Plan Merger to Create $130 Billion Temporary Chemical Giant
(Score: 0) by Anonymous Coward on Friday December 11 2015, @11:36PM
Where's captain planet when you need him? I guess they will continue to poison the world with little to no repercussions.
(Score: 5, Interesting) by edIII on Friday December 11 2015, @11:46PM
At what point we will start to acknowledge that DuPont has actually done more damage to humanity than Hitler? That's not Godwin folks, I actually believe that the effects of their toxic chemicals, complete and total disregard to worker safety and life in general, and numerous and repeated attempts to cover up the truth has done more damage to the world than the Nazi's did in WWII. The medical fallout since then has probably killed many times the number of the people involved in the Holocaust via cancer and horrific endings caused by toxic chemicals. Those that didn't die from that, died from violence induced all that lead exposure for the nearly 3 decades it could have been stopped.... if it weren't for DuPont executives.
We even sit here today with DuPont executives guilty of chemically torturing their workers (some they knew were pregnant), and in what can only be described as "serial killer like" mentality in their known torturing of a poor farm family over six decades. We have them on record openly stating that it would be a better idea, more in service to the shareholder, to continue torturing that poor family until they were caught.
DuPont is not needed, their executives can DIAF, and we will not be worse off. All of those engineers coming up with new materials can easily be working for other smaller corporations that might actually not be benefiting from such horrific regulatory and political capture.
Instead, we are considering giving the men and women in charge of both those companies even more power than ever. Yes, we've yet to ever receive justice either.
DuPont: Too Big For Justice
Technically, lunchtime is at any moment. It's just a wave function.
(Score: 0) by Anonymous Coward on Friday December 11 2015, @11:38PM
Du Dow Brown Chow
(Score: 0, Funny) by Anonymous Coward on Friday December 11 2015, @11:51PM
If Dow Chemical and Dupont merge and then split up, then which is the exothermic transaction and which is the endothermic one?
(Score: 1, Touché) by Anonymous Coward on Saturday December 12 2015, @12:13AM
They are both exothermic. The end result will be hundreds of millions of share holder dollars, and peon jobs, exfilitrated to C-level bonuses and consulting fees to investment banks for "assisting" in the transactions.
(Score: 4, Informative) by Mr Big in the Pants on Saturday December 12 2015, @01:39AM
These companies tend to measure their reactions in how many people will be killed by it - it's often a non-zero number.
You then multiply this by the chance that anyone will care if these particular people die - it's often zero.
Then you use this number to work out the penalty costs involved: coverups, bribes, payouts and anti-marketing.
Take this away from your profit.
Then you make the decision on whether this reaction is worth doing if it is >0.
(Score: 3, Interesting) by bzipitidoo on Saturday December 12 2015, @01:02AM
Some have observed that there appears to be a correlation between an uptick in size and quantity of mergers just before a market collapse. The thought is that mergers are a sign businesses are getting desperate to keep profit up, as their usual sources of profit start to dry up.
(Score: 2) by frojack on Saturday December 12 2015, @03:52AM
What do those people say about companies that split based on Market segment?
Seems HP is doing that, as is Alcoa, as well as Yum brands, eBay, Symantec, ConAgra. The list is pretty log
Why? Because its mor profitable [forbes.com]:
Shares of North American conglomerates were outperformed by their split-up rivals by an average of 11.4 percent from 2000 to 2010, Shivdasani found.
Not only that, but Shivdasani’s data also found that in the three months following an organization’s announcement of a split, their shares outperformed their rivals by 6 percent, a trend believed to be set to continue.
Probably has something to do with business finally getting around to look at efficiency, and notice that two competing small divisions never gain traction, but once combined there are economies of scale, as well as cost savings. Lots of companies have a division just because their competition has one, and neither is all that successful. The difference these days is companies have finally gotten over themselves, and are willing to trade the cards in their hand for a better hand.
Yup. Employees, desks, buildings, traded like so many monopoly pieces.
No, you are mistaken. I've always had this sig.
(Score: 1) by redneckmother on Saturday December 12 2015, @04:35AM
Mergers, splits, blah blah blah...
To me, the fundamental problem lies (in at least two senses of the term) within "The United States of Corporate America".
Individuality, which was fundamental when the US was founded, is (effectively) dead, an anachronism. As several of the founders and subsequent leaders warned, the US has succumbed to corporatism.
“Fascism should more appropriately be called Corporatism because it is a merger of state and corporate power”
― Benito Mussolini
Just my opinion (and, yes, I know the asshole quote).
Mas cerveza por favor.
(Score: 0) by Anonymous Coward on Saturday December 12 2015, @05:27AM
FYI Mussolini never said that and fascism typically involves violence for the very little reason [vox.com] other than the sake of violence. It also has little to do with economics.
(Score: 0) by Anonymous Coward on Saturday December 12 2015, @01:30AM
By the value of products sold, BASF was the biggest chemical producer last year.
https://en.wikipedia.org/wiki/List_of_largest_chemical_producers [wikipedia.org]
(Score: 4, Insightful) by Snotnose on Saturday December 12 2015, @01:45AM
Not to up on chemical companies, but seems to me that when the 2 largest merge that makes a monopoly, which means the average Joe loses. They're already talking layoffs, again the average Joe loses. I'm guessing the overall result will be less R&D, again the average Joe loses (notwithstanding the bad things their chemicals do).
Once again, the 1% make out like bandits while the average Joe gets the shaft.
When the dust settled America realized it was saved by a porn star.
(Score: 2) by frojack on Saturday December 12 2015, @04:07AM
Joining into one company just saves a lot of sales back and forth of parts of companies.
The splitting was what they were after all along. Two competing divisions, one in each company, neither gaining traction. Add them together, trim some redundant staff, trim some redundant infrastructure, retain the joint customer base, shed competition, raise prices a little or a lot. Profit.
Not so good for the Average Joe working at each company.
No, you are mistaken. I've always had this sig.
(Score: 3, Insightful) by darkfeline on Saturday December 12 2015, @01:58AM
So they want to create three different monopolies in three different market sectors?
Join the SDF Public Access UNIX System today!
(Score: 2) by captain normal on Saturday December 12 2015, @03:50AM
"Agriculture: "Leading global pure-play agriculture company that unites DuPont's and Dow's seed and crop protection businesses." Revenue: $19 billion.
Material Science: "A pure-play industrial leader, consisting of DuPont's Performance Materials segment, as well as Dow's Performance Plastics, Performance Materials and Chemicals, Infrastructure Solutions, and Consumer Solutions ... operating segments." Revenue: $51 billion.
Specialty Products: "The businesses will include DuPont's Nutrition & Health, Industrial Biosciences, Safety & Protection and Electronics & Communications, as well as the Dow Electronic Materials business." Revenue: $13 billion."
Material Science doesn't seem too scary. Agriculture looks really scary and Specialty Products looks down right terrifying..
Everyone is entitled to his own opinion, but not to his own facts"- --Daniel Patrick Moynihan--
(Score: 0) by Anonymous Coward on Saturday December 12 2015, @02:05AM
In "Rollerball", [wikipedia.org] each major city was completely owned by 1 megacorporation; there are no "citizens", only employees.
"Rollerball" was set in 2018.
Apparently, we have a bit over 2 years until corporations are city-sized, are all-powerful, and what then passes for society completely eliminates individualism for all except the most exceptional.
-- gewg_
(Score: 3, Informative) by captain normal on Saturday December 12 2015, @04:08AM
"city-sized" ? Quite a few for these large corporations are passed county, state into "national sized" entities, beyond the control of even those who appear to lead them.
Everyone is entitled to his own opinion, but not to his own facts"- --Daniel Patrick Moynihan--
(Score: 1, Informative) by Anonymous Coward on Saturday December 12 2015, @04:12AM
Samsung accounts for 17% of South Korea's GDP. Hyundai and LG aren't far behind.
http://lens.blogs.nytimes.com/2015/11/13/samsung-and-the-south-korean-success-story/ [nytimes.com]
https://en.wikipedia.org/wiki/Chaebol#Chaebol_by_revenue [wikipedia.org]
(Score: 1) by termigator on Saturday December 12 2015, @04:27AM
John-A-Thon! John-A-Thon! John-A-Thon!
[cue the organ music]