Agricultural business based in state will carry the DuPont name

In a stunning development, DuPont and Dow announced in a joint release that Delaware will be the location for the headquarters of the agriculture company they intend to create after completion of their proposed merger.

The deal includes a nearly $10 million incentive package by the state.

The new publicly traded company  will also carry the DuPont name, although no final brand has been developed.

The decision may not have a sizable impact on Delaware employment for DuPont, with one investment analyst claiming the company would only employ 100 or so. Others said 200 to 300 could be working at the office.

Dow DuPont sites in Johnston, Iowa and Indianapolis,  will serve as Global Business Centers, with many functions  concentrated in the two Midwest locations. All DuPont sites have seen at least 10 percent job cuts, with Delaware  dealt a  heavy blow with a 25 percent job reduction . That  could leave the state with a headcount of 5,000 or less.

“This efficient structure takes full advantage of the unique expertise and resources that exist in each location, enabling us to deliver the long-term opportunity for the leading global agriculture company we intend to create,” said Edward D. Breen,  CEO of DuPont. “Our deep presence in Iowa and Indiana will continue the close ties to our customer base and the broader  agriculture community, while leveraging the existing corporate infrastructure and expertise we have in Delaware – DuPont’s home for more than 200 years.”

The state had been considered a long shot for the headquarters of the key business of the combined companies, with DuPont’s Pioneer business in Iowa believed to be the lead candidate.

The headquarters will include the CEO’s  office and key corporate support functions.  Employment impact was not disclosed, although it is not believed that the numbers would make up for the loss of 1,700 jobs at DuPont during the last couple of months.

Headquarters, in the current environment,  are often comprised of a few hundred employees. In December, DuPont and Dow announced the  Specialty Products business that would be established after the merger.

The Friday announcement means that the headquarters of two out of the three companies being created as a result of the planned separations following the merger of Dow and DuPont will be located in Delaware.

A release from Gov. Jack Markell’s office indicated that the total combined revenue of the Agriculture and Specialty Products businesses will be greater than the revenue of DuPont today.

“This announcement is a win for Delaware,” said  Markell. “This decision would not have happened had it not been for the dedication and hard work put in by Sens.  Coons and Carper, Congressman Carney, leadership from both parties in the General Assembly, County Executive Gordon and members of County Council, and leaders at our state educational institutions. I also want to thank DuPont CEO Ed Breen, Dow CEO Andrew Liveris, and Jim Collins, the Executive Vice President of DuPont’s Agriculture unit, for their dedication to this issue.”

Markell added that “DuPont and Dow made this decision because they recognized that Delaware, with its top quality workforce, access to major cities, and proximity to key global markets, is the ideal location for the headquarters of the globalized, 21st-century business that they intend to create. This new business is well-positioned to develop into a leader in the agricultural sciences field, and we intend to help support that growth.”

“The decision to locate the corporate headquarters of the Agriculture company that will result from the Dow DuPont merger is welcomed news,” said U.S. Sen. Tom Carper. “Our governor has provided exemplary leadership with the active support of the Congressional delegation and many others to make this decision a reality. I want to thank Ed Breen and Jim Collins and the DuPont team, along with Dow CEO Andrew Liveris, for the active role they’ve played in this decision. This wouldn’t have happened without their involvement and support.”

“We needed some good news today, and we got it,” said U.S. Sen. Chris Coons. “Today we learned that DowDuPont will locate headquarters for their post-merger agriculture business in Delaware, which is a testament to DuPont’s world-class workforce in Delaware. This is a positive step for the continuing relationship between Delaware and DowDuPont. While we aren’t entirely out of the woods yet, this is a positive sign that the leadership of DowDuPont remains committed in this important sector to their roots as a Delaware company.”

“We’ve been fighting hard throughout this entire process to keep as many jobs in Delaware as possible.  This decision is a win for our state, and most importantly, for the employees who will fill these jobs. I’m convinced their talent and expertise was a key factor in the decision,” said Congressman John Carney.  “DuPont is still in transition, and there is a lot more work to be done to help those leaving the company to find new opportunities. But, keeping the Agriculture headquarters in Delaware was an important objective.  I will continue working to help other former DuPont employees’ transition to a new phase of their careers.”

A major element of the state’s pitch to the companies on why they should locate the headquarters of the agriculture business in Delaware was the availability of top-level talent from local universities, such as the University of Delaware and Delaware State University, both of which have had over a 100-year relationship with DuPont, the release stated.

“Today’s announcement underscores the commitment of the Governor and DuPont to work together as we collectively reimagine the economic development future of the First State,” said University of Delaware President-Elect  Dennis Assanis. “As I assume the leadership of the University, I am dedicated to continuing an environment of scientific discovery and technological innovation, where collaborative R&D with DowDuPont and the seeding of entrepreneurial start-ups will flourish, leveraging the intellectual and scientific talent of our great state.”

“It is exciting to learn that DowDuPont recognizes that Delaware is a state where a great multinational agriculture business can thrive,” Delaware State University President Dr. Harry Williams said. “DSU stands ready to assist DowDuPont by making available the robust research capacity of the University’s College of Agriculture and Related Sciences and its farm properties to find ways to help DowDuPont to achieve its vision across the world.”

“This is great news for Delaware and a testament to the work led by the Governor and his team to find opportunity during this time of great transition in our economy,” said Delaware Tech President Mark Brainard. “Delaware Tech stands ready to continue these efforts in the months ahead by providing relevant and creative programs and a high-quality workforce for business and industry throughout our state.”

“For generations, DuPont has been central to the fabric of Delaware’s economy,” said Senate President Pro Tempore Patricia Blevins. “I was happy to learn of the company’s decision to locate its Agriculture headquarters here, and I’m optimistic this decision, combined with its decision on the Specialty Products business, signals DuPont’s long-term commitment to the state it has always called home.”

“DuPont has a 200-year history in Delaware, and today’s announcement ensures that this longstanding relationship will continue well into the future,” said House Speaker Pete Schwartzkopf. “By Delaware reaching this agreement with DuPont, we are telling families that we as a state are committed to keeping good-paying, high-quality jobs here in Delaware.”

“It is welcome news that DuPont will headquarter their Agriculture business spinoff in Delaware,” said Senate Minority Whip Greg Lavelle. “Given the impact of recent decisions to reduce employment, I’m certain that many families are relieved to learn of this decision. As DuPont transforms itself to remain viable and competitive in a global market, Delaware must do that as well and I’ll look forward to working with the Governor, legislative leadership, and members of the General Assembly to modify our tax code in an effort to keep and attract businesses to Delaware.”

“Today’s announcement is good news for the state of Delaware and for New Castle County,” said New Castle County Executive Tom Gordon. “Many of the residents of the county are employed by the company, and I hope that this decision brings a bit of certainty to some of the families who have been unsure what the future looked like.”

As part of the agreement, the Governor has committed to work to pass reforms to Delaware’s tax code. These reforms will include a modification of the state’s research and development tax credit to lift yearly expenditure caps and make the credit refundable, as well as the reintroduction of a modernized version of Delaware’s “New Economy Jobs Tax Credit,” intended to attract corporate headquarters jobs to Delaware. The credit provides a value calculated from a portion of the total payroll of a company that contributes high paying jobs to the Delaware economy. Neither of these changes would impact budget projections for fiscal  2017, according to a release.

To help secure the agreement to locate the headquarters of the Agriculture business in the state, the Delaware Economic Development Office agreed to submit a Strategic Fund grant to the Council on Development Finance that could be worth a total of $9.6 million over five years.  Most of this is in the form of matching funds capital expenditure assistance, which will help the company and related spinoffs upgrade research facilities in Delaware. To achieve the full amount, they would need to spend at least $200 million in the state on those types of projects over the five-year time frame.

“DuPont and Dow’s decision to locate the headquarters of the Agriculture company in Delaware is great news for our state. As home to this new company, Delaware provides a strong foundation on which to build the company’s future success,” said Director Bernice Whaley, of the Delaware Economic Development Office.

DuPont and Dow hope to secure shareholder and federal government approval of their proposed merger by the end of 2016. Once approval is completed, they hope to complete the separation of the three new companies within the next two years.

The deal will also burnish the legacy of Markell, whose administration saw economic development victories and setbacks after taking office in the depths of the 2009 recession.

Wins have included the decision by JPMorgan Chase to add 1,800 jobs in the state and a successful effort to open the Delaware City Refinery, the source of  an estimated 1,000 jobs.

On the minus side, the state suffered a loss with the bankruptcy of Fisker Automotive, which received a $20 million financial package from the state.

Click on the link below for a  copy of a presentation that Gov. Markell gave to Ed Breen and Jim Collins in early January:http://inde.delaware.gov/Dedo_downloads/Delaware_Agriculture_17Feb16.pdf