DuPont and The Dow Chemical Company announced that they will merge operations into a combined company that will be named DowDuPont. They will then separate DowDuPont into three independent, publicly traded companies 18-24 months following the closing of the merger.
“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,” says Andrew N. Liveris, Dow’s chairman and CEO. “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.”
The merger will create a chemical and agricultural giant with a combined market value of about $130 billion. The deal is among the top 20 biggest mergers ever.
"When I look and DuPont and Dow, I see businesses that fit together like hand in glove," DuPont CEO Edward Breen said in a conference call. "The strategic nature of what we could pull off is incredible. To me it checks all the boxes of a great deal and a way to create value for our shareholders."
Before the merger, DuPont said it will shed $700 million in costs, with about 10% of its global workforce "impacted," according to a statement. The company had 63,000 employees at the end of 2014.
For its part, Dow is slashing $300 million in costs before the closure of the deal as part of what it called a three-year, $1 billion "productivity plan."
Upon completion of the transaction, Liveris will become executive chairman of the newly formed DowDuPont Board of Directors and Breen, chair and CEO of DuPont, will become CEO of DowDuPont. In these roles, both Liveris and Breen will report to the Board of Directors. DowDuPont will be dual headquartered in Midland, Mich. and Wilmington, Del.