DowDuPont

Structure of the company

After consolidation in 2015 Dow Chemical Co. and DuPont Co. was announced that assets will be separated into three directions:

• chemistry for agriculture, including herbicides and GMO,
• raw materials and semi-finished products, including different plastic,
• products of thin organic synthesis which are applied among other things in production of solar batteries.

History

2015: The consolidation Dow Chemical Co. and DuPont Co. in DowDuPont

In December, 2015 the American companies Dow Chemical Co. and DuPont Co. announced merge. Consolidation of the oldest corporations became one of the largest transactions in the world chemical industry. At the time of closing of biddings on December 10, 2015 cumulative capitalization of the companies exceeded $130 billion.

The preliminary name resulted from a corporation merger – DowDuPont. The created company is going to be separated into three independent highly specialized businesses, each of which will undergo listing at the exchange, was noted in a joint statement of the companies.

One of businesses should specialize in chemistry for agriculture, including herbicides and GMO, the second - in raw materials and semi-finished products, including different plastic, the third - in products of thin organic synthesis which are applied among other things in production of solar batteries.

It was announced that the CEO of Dow Chemical Andrew Liveris will hold a post of the head of Board of Directors of the formed corporation, the CEO of DuPont Edward Brin will become her CEO^[1].

The transaction passes in the interchange format of actions. Shareholders of Dow Chemical receive according to one paper of DowDuPont on each stock of Dow Chemical owned by them, shareholders of DuPont - 1.282 actions.

Despite the size and complexity of the transaction, it is expected that the companies will be able to get permission to merge from antimonopoly authorities. Possibly, regulators will concentrate the attention on production of seeds and agricultural chemicals, the analyst of Bloomberg Intelligence Jason Mayner considers. But even in these markets Dow Chemical and DuPont have competitors, in particular Syngenta AG, Monsanto Co. and Bayer AG companies, the expert added.

DuPont expects that merge will demand write-off about $780 million before accounting of taxes and 10% of jobs will concern.

The share value of DuPont fell by 4% during preliminary biddings in New York. Papers of Dow Chemical, on the contrary, rose in price for 1.5%.

Notes