Edward Breen, chairman and CEO of DuPont, and Andrew Liveris, president chairman and CEO of Dow
DuPont and The Dow Chemical Company have made an agreement under which the companies will combine in an all stock merger of equals.
The combined company will be named DowDuPont which will subsequently be separated into three independent, publicly traded companies. This is expected to be within 18-24 months following the closing of the merger.
The three companies will be focused on agriculture, material science and specialty products respectively.
‘This transaction is a game changer for our industry and reflects the culmination of a vision we have had for more than a decade to bring together these two powerful innovation and material science leaders,’ said Andrew Liveris, Dow chairman and chief executive officer. ‘Over the last decade our entire industry has experienced tectonic shifts as an evolving world presented complex challenges and opportunities – requiring each company to exercise foresight, agility and focus on execution. This transaction is a major accelerator in Dow’s ongoing transformation, and through this we are creating significant value and three powerful new companies. This merger of equals significantly enhances the growth profile for both companies, while driving value for all of our shareholders and our customers.’
Edward Breen, chairman and chief executive officer of DuPont, said, ‘For DuPont, this is a definitive leap forward on our path to higher growth and higher value. This merger of equals will create significant near‐term value through substantial cost synergies and additional upside from growth synergies. Longer term, the three‐way split we intend to pursue is expected to unlock even greater value for shareholders and customers and more opportunity for employees as each business will be a leader in attractive segments where global challenges are driving demand for these businesses’ distinctive offerings.’
The material science company will consist of DuPont’s Performance Materials segment, as well as Dow’s Performance Plastics, Performance Materials and Chemicals, Infrastructure Solutions, and Consumer Solutions operating segments. According to the companies the combination of complementary capabilities will create a low cost, innovation driven leader that can provide customers in high growth, high value industry segments in packaging, transportation, and infrastructure solutions, among others with a broad and deep portfolio of cost effective offerings.
Upon closing of the transaction, the combined company would have a combined market of approximately $130 billion. Under the terms of the transaction, Dow shareholders will receive a fixed exchange ratio of 1.00 share of DowDuPont for each Dow share, and DuPont shareholders will receive a fixed exchange ratio of 1.282 shares in DowDuPont for each DuPont share. Dow and DuPont shareholders will each own approximately 50 percent of the combined company, on a fully diluted basis, excluding preferred shares.
