Company:DowDuPont

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DowDuPont Inc.
TypePublic
  • NYSE: DWDP
  • DJIA component
  • S&P 100 component
  • S&P 500 component
IndustryChemicals
Predecessors
FoundedSeptember 1, 2017; 6 years ago (2017-09-01)
HeadquartersMidland, Michigan, USA and Wilmington, Delaware, USA
Area served
Global
Key people
  • Jeff Fettig
    (Chairman)
  • Edward D. Breen
    (CEO)
  • Howard Ungerleider
    (CFO)
RevenueIncrease US$62.484 billion (2017)[1]
Decrease US$4.926 billion (2017)[1]
Decrease US$1.460 billion (2017)[1]
Total assetsIncrease US$192.164 billion (2017)[1]
Total equityIncrease US$100.330 billion (2017)[1]
Number of employees
~98,000 (2017)[1]
Websitewww.dow-dupont.com

DowDuPont Inc. is an American company formed after the merger of Dow Chemical and DuPont on August 31, 2017. It is the world's largest chemical company in terms of sales. Within 18 months the company will be split into three publicly-traded companies which will focus on the following: agriculture, materials science, and specialty products.[2][3][4] The agriculture division is named Corteva Agriscience, the materials science division is named Dow, and the specialty products division is named DuPont.[5] Jeff Fettig is the chairman of the board of directors,[6] and Edward Breen is the CEO. The merger has been reported to be worth an estimated $130 billion.[2][3][4]

History

On December 11, 2015, DuPont announced a merger with Dow Chemical Company, in an all-stock transaction. The combined company, DowDuPont, will have an estimated value of $130 billion, being equally held by both companies’ shareholders, while also maintaining its two headquarters. The merger of the two largest U.S. chemical companies closed on August 31, 2017.[3][4][7]

Both companies' boards of directors decided that following the merger, DowDuPont would pursue a separation into three independent, publicly-traded companies: an agriculture, a materials science, and a specialty products company. The agriculture business—Corteva Agriscience[8]—would unite Dow and DuPont’s seed and crop protection unit, with an approximate revenue of $16 billion.[9] The materials science segment—to be called Dow—would consist of DuPont’s Performance Materials unit, together with Dow’s Performance Plastics, Materials and Chemicals, Infrastructure and Consumer Solutions, but exclude DOW's Electronic Materials business. Combined revenue for this branch totals an estimated $51 billion. Finally, the specialty products unit—to be called DuPont—would include DuPont’s Nutrition & Health, Industrial Biosciences, Safety & Protection and Electronics & Communications, as well as Dow’s aforementioned Electronic Materials business. Combined revenue for Specialty Products will total approximately $12 billion.[10][11]

Advisory Committees were established for each of the businesses. DuPont CEO Ed Breen would lead the Agriculture and Specialty Products Committees, and Dow CEO Andrew Liveris would lead the Materials Science Committee. These Committees were intended to oversee their respective businesses, and would work with both CEOs on the scheduled separation of the businesses’ standalone entities.[12] Announced in February 2018, DowDuPont's agriculture division is named Corteva Agriscience, its materials science division is named Dow, and its specialty products division is named DuPont.[5] In March 2018, it was announced that Jeff Fettig would become executive chairman of DowDuPont on July 1, 2018, and Jim Fitterling would become CEO of Dow Chemical on April 1, 2018.[13] In October 2018, the company's agricultural unit recorded a $4.6 billion loss in the third quarter after lowering its long-term sales and profits targets.[14]

Regulation

The European Commission opened a probe to assess whether the proposed merger was in line with the EU’s respective regulations. The Commission investigated whether the deal reduced competition in areas such as crop protection, seeds and petrochemicals.[15] The closing date for the merger was repeatedly delayed due to these regulatory inquiries.[16][17]

Ed Breen said the companies were negotiating possible divestitures in their pesticide operations to win approval for the deal. As part of their EU counterproposal, the companies offered to dispose of a portion of DuPont’s crop protection business and associated R&D, as well as Dow’s acrylic acid copolymers and ionomers businesses.[18][19]

The remedy submission in turn delayed the Commission’s review deadline to April 4, 2017. The intended spins of the company businesses are reported to occur about 18 months after closing.[19] According to the Financial Times, the merger was "on track for approval in March" 2017.[20] Dow Chemical and DuPont postponed the planned deadline during late March, as they struck an $1.6 billion asset swap with FMC Corporation in order to win the antitrust clearances. DuPont will acquire the Corporation's health and nutrition business, while selling its herbicide and insecticide properties.[21][22]

The Commission conditionally approved the merger as of April, 2017, although the decision was said to consist of over a thousand pages and was expected to take several months to be released publicly. As part of the approval, Dow must also sell off two acrylic acid co-polymers manufacturing facilities in Spain and the US. India, Brazil, Russia, the US, and South Africa have yet to clear the merger, while China conditionally did so in May, 2017.[23][22][24]

Opinions

According to former United States Secretary of Agriculture during the Clinton administration, Dan Glickman, and former Governor of Nebraska, Mike Johanns, by creating a single, independent, U.S.-based and -owned pure agriculture company, Dow and DuPont would be able to compete against their still larger global peers.[25]

On the other hand, if Monsanto and Bayer, the 1st and 3rd largest biotech and seed firms, together with Dow and DuPont being the 4th and 5th largest biotechnology and seed companies in the world respectively, both went through with the mergers, the so-called "Big Six" in the industry would control 63 percent of the global seed market and 76 percent of the global agriculture chemical market. They would also control 95 percent of corn, soybeans, and cotton traits in the US. Both duopolies would become the "big two" industry dominators. According to Roger Johnson, president of the National Farmers Union, the key to innovation is competition, not concentration.[26] [27]

The merger formed the world's largest chemical company in terms of sales. Dow DuPont is dual headquartered in Midland, Michigan and Wilmington, Delaware.[28][29][30]

References

  1. ↑ 1.0 1.1 1.2 1.3 1.4 1.5 "DowDuPont Inc. 2017 Annual Report (Form 10-K)". U.S. Securities and Exchange Commission. February 2018. https://www.sec.gov/Archives/edgar/data/1666700/000166670018000009/a2017dwdp10-k.htm. 
  2. ↑ 2.0 2.1 "Dow, DuPont complete planned merger to form DowDuPont". Reuters. September 1, 2017. https://www.reuters.com/article/us-dow-m-a-dupont/dow-dupont-complete-planned-merger-to-form-dowdupont-idUSKCN1BC4MO. 
  3. ↑ 3.0 3.1 3.2 Tullo, Alexaner H. (August 31, 2017). "Historic DowDuPont merger nears". Chemical and Engineering News: pp. 13. http://cen.acs.org/articles/95/i35/Historic-DowDuPont-merger-nears.html. Retrieved August 31, 2017. 
  4. ↑ 4.0 4.1 4.2 Steve, Carmody (August 31, 2017). "Dow-DuPont merger becomes official". Michigan Radio. http://michiganradio.org/post/dow-dupont-merger-becomes-official. 
  5. ↑ 5.0 5.1 "DowDuPont names three company brands for separation". https://www.icis.com/resources/news/2018/02/26/10197043/dowdupont-names-three-company-brands-for-separation/. Retrieved May 27, 2018. 
  6. ↑ https://www.bloomberg.com/news/articles/2018-03-12/dowdupont-chairman-liveris-to-step-down-april-1-wsj-reports
  7. ↑ Kaskey, Jack. "DuPont CEO Gives Investors Confidence Dow Deal Is on Track". Bloomberg. https://www.bloomberg.com/news/articles/2017-01-24/dupont-earnings-top-estimates-on-sales-of-plastics-to-carmakers. Retrieved June 2, 2017. 
  8. ↑ "DowDuPont Announces Brand Names for the Three Independent Companies It Intends to Create, Reflecting Ongoing Progress towards Separations". http://www.dow-dupont.com/news-and-media/press-release-details/2018/DowDuPont-Announces-Brand-Names-for-the-Three-Independent-Companies-It-Intends-to-Create-Reflecting-Ongoing-Progress-towards-Separations/default.aspx. Retrieved May 27, 2018. 
  9. ↑ Mordock, Jeff. "Bayer-Monsanto deal could turn up heat on Dow/DuPont". Wilmington, DE. http://www.delawareonline.com/story/money/2016/05/21/bayer-monsanto-deal-could-turn-up-heat-dowdupont/84593690/. Retrieved June 2, 2017. 
  10. ↑ Mordock, Jeff. "to sell businesses to win EU approval". http://www.delawareonline.com/story/money/2017/02/08/dow-dupont-offer-sell-businesses-win-eu-merger-approval/97637414/. Retrieved June 2, 2017. 
  11. ↑ Mordock, Jeff. "After Dow-DuPont merger, more pain or gain?". Wilmington, DE. https://www.usatoday.com/story/money/nation-now/2016/07/18/after-dow-dupont-merger-more-pain-gain/87272644/. Retrieved June 2, 2017. 
  12. ↑ Ariel, Steve. "Analyzing the US Chemical Industry’s Biggest Merger". http://marketrealist.com/2015/12/dow-chemical-dupont-us-chemical-industrys-biggest-merger/. Retrieved June 2, 2017. 
  13. ↑ Benoit, David (March 12, 2018). "Dow Chemical’s Andrew Liveris to Depart; Jim Fitterling to Be CEO of New Dow After Breakup". https://www.wsj.com/articles/dow-chemicals-andrew-liveris-to-depart-jim-fitterling-to-be-ceo-of-new-dow-after-breakup-1520827380. Retrieved May 27, 2018. 
  14. ↑ Maidenberg, Micah; Bunge, Jacob (2018-10-18). "DowDuPont to Record $4.6 Billion Charge as Agriculture Unit Suffers" (in en-US). Wall Street Journal. ISSN 0099-9660. https://www.wsj.com/articles/dowdupont-to-record-4-6-billion-charge-as-agriculture-unit-suffers-1539902403. 
  15. ↑ Cardoso, Ricardo. "Mergers: Commission opens in-depth investigation into proposed merger between Dow and DuPont". European Commission. http://europa.eu/rapid/press-release_IP-16-2784_en.htm. Retrieved June 2, 2017. 
  16. ↑ Trefis staff. "Why Dow Chemical Company's Stock Was Up Last Week". https://www.forbes.com/sites/greatspeculations/2017/01/30/why-was-dow-chemical-companys-stock-up-last-week/#3cfcb62c6c28. Retrieved June 2, 2017. 
  17. ↑ Gurdus, Elizabeth. "Dow Chemical CEO and Trump manufacturing advisor: How US companies can benefit from 'fair trade'". CNBC. https://www.cnbc.com/2017/01/26/dow-chemical-beats-earnings-and-revenue-estimates.html. Retrieved June 2, 2017. 
  18. ↑ Bunge, Jacob. "DuPont pushes back Dow deal closing". http://www.marketwatch.com/story/dupont-pushes-back-dow-deal-closing-2017-01-24. Retrieved June 2, 2017. 
  19. ↑ 19.0 19.1 Jordan, Heather. "Dow, DuPont submit concessions to EU to gain merger approval". Booth Newspapers. http://www.mlive.com/news/saginaw/index.ssf/2017/02/dow_dupont_submit_remedy_packa.html. Retrieved June 2, 2017. 
  20. ↑ Toplensky, Rochelle. "ChemChina takeover of Syngenta nears EU approval". https://www.ft.com/content/44777ada-ff5c-11e6-96f8-3700c5664d30. Retrieved June 2, 2017. 
  21. ↑ Kaskey, Jack. "Dow-DuPont Merger Delayed Again Amid $1.6 Billion FMC Deal". https://www.bloomberg.com/news/articles/2017-03-31/dow-dupont-merger-delayed-again-amid-1-6-billion-deal-with-fmc. Retrieved June 2, 2017. 
  22. ↑ 22.0 22.1 Bomgardner, Melody M.. "Two big agchem mergers near completion". http://cen.acs.org/articles/95/i15/Two-big-agchem-mergers-near.html. Retrieved June 2, 2017. 
  23. ↑ King, Anthony. "EU conditionally approves Dow–DuPont merger". https://www.chemistryworld.com/news/eu-conditionally-approves-dowdupont-merger/3007072.article. Retrieved June 2, 2017. 
  24. ↑ Anantharaman, Muralikumar; Schmollinger, Christian. "Dow, Dupont planned merger gets conditional nod from China". Reuters. https://www.reuters.com/article/us-du-pont-m-a-dow-china-idUSKBN17Y0TA. Retrieved June 2, 2017. 
  25. ↑ GLICKMAN, Dan; JOHANNS, Mike. "Bush, Clinton Ag Secretaries: U.S. Needs American Ag Company to Counter Foreign Competition". https://morningconsult.com/opinions/bush-clinton-ag-secretaries-u-s-needs-american-ag-company-counter-foreign-competition/. Retrieved June 2, 2017. 
  26. ↑ Johnson, Roger. "Competition Spurs the Best Innovation". https://morningconsult.com/opinions/competition-spurs-best-innovation/. Retrieved June 2, 2017. 
  27. ↑ "Dow Chemical, DuPont reach deal on merger". https://www.usatoday.com/story/money/business/2015/12/11/dupont-dow-chemical-merger/77137888. Retrieved 28 May 2018. 
  28. ↑ "Dow, DuPont to Review Breakup Plan After Merger". Fox News. http://www.foxbusiness.com/features/2017/05/11/dow-dupont-to-review-breakup-plan-after-merger.html. [full citation needed]
  29. ↑ "Dow, DuPont merger wins U.S. antitrust approval with conditions". http://in.reuters.com/article/du-pont-m-a-dow-idINKBN1962SJ. Retrieved 28 May 2018. 
  30. ↑ "Dissecting the Dow and DuPont Deal, from Merger to Split?". https://www.forbes.com/sites/greatspeculations/2016/08/30/dissecting-dow-and-dupont-deal-from-merger-to-split/#666271816967. 

External links

Official website




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