By JIM RUTLEDGE D.C. Correspondent WILMINGTON, Del. — It’s official: After nearly 22 months of intense worldwide regulatory scrutiny, the $130 billion merger of the Dow Chemical Co. with the DuPont Co. is now complete, effective August 31. The deal creates the world’s largest crop protection and seed company in the $1 trillion evolving global agricultural business landscape. The new company, DowDuPont, is now dualheadquartered in Midland, Mich., and Delaware, and began trading on the New York Stock Exchange last Friday as DWDP.
“Today (Sept. 1) marks a significant milestone in the storied histories of our two companies,” said Andrew Liveris, executive chair of DowDuPont, most recently the Dow chair who engineered the mega-merger. “While our collective heritage and strength are impressive, the true value of this merger lies in the intended creation of three industry powerhouses that will define their markets and drive growth to benefit of all stakeholders.” The company’s new CEO, Ed Breen, DuPont’s former chair and CEO, added, “With the merger now complete, our focus is on finalizing the organizational structures that will be the foundation of these strong companies.” The transaction created three independent entities, with Breen heading up the agriculture company with $19 billion in revenue and a rival to the Monsanto Co.’s pesticides and seed business. There is also a $13 billion “specialty products” conglomerate combining DuPont’s biomaterials, electronics, safety equipment and food additives divisions, based in Delaware. Liveris will oversee DuPont’s $51 billion “material science” company, including DuPont’s $5 billion automotive and “performance” group, based at Dow’s offices in Michigan. When the merger was first announced, the companies said the combination of the two would create $1 billion in savings by eliminating some dual functions, including laying off more than 4,200 employees from a total workforce of more than 102,000. DuPont cut 1,700 jobs worldwide, including scientists, while Dow said it would chop 2,500. At the end of July, the company announced the opening of its new 184,000 square-foot Global Dow Center in Midland with approximately 470 employees and contractors. At about the same time, the company broke ground on a new $100 million state-of-the-art research and development center at the Dow Corning Corp. campus. The 750,000 square-foot corporate center houses 1,160 employees. In June, the National Farmers Union (NFU) criticized the U.S. Department of Justice’s (DOJ) antitrust watchdogs for approving the merger, saying at the time the consolidation of the companies would “allow money and power to be drained from family farm operations and rural communities.” NFU president Roger Johnson said the deal would lead to “lost jobs, lower wages, inflated costs, decreased economic opportunity and depleted resources.” As a condition to win regulatory approval from the Federal Trade Commission and the DOJ, Dow agreed to spin off its plastics operation, Ethylene Acrylic Acid (EAA) business, divesting the division to a South Korea-based company for $370 million. And DuPont agreed to sell its market-leading Finesse and Rynaxypyr crop treatment products. DowDuPont said the new agriculture company was formed combining the three divisions of DuPont Pioneer, DuPont Crop Protection and Dow AgroSciences, all now headquartered in Wilmington with its global business center in Johnston, Iowa, and Indianapolis. The Dow-DuPont deal is one of three mega-mergers over the past two years to hit the agricultural chemical and seed companies industries. Monsanto and German chemicals manufacturer Bayer AG said earlier last month they hope to complete their $66 billion deal by the second quarter of 2018, but currently are facing stiff regulatory review before the European Commission. The transaction would create the world’s largest integrated pesticides and seeds company. In April, the European Union and U.S. antitrust regulators approved the $43 billion acquisition of the Swiss agribusiness Syngenta AG by the China National Chemical Corp., with the stern condition that ChemChina spin off significant parts of its European pesticide and plant growth regulator operation. As a result of the completed DowDuPont merger, Dow’s and DuPont’s shareholders will each own approximately 50 percent of the combined company, on a fully diluted basis, excluding preferred shares, company officials said. |