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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?
(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.