DowDuPont business realignment moves more units to Delaware-based company

0
Graphic courtesy of WHYY Newsworks.

DowDuPont has altered the business mix for two of the three companies that will be spun off in the next year and a half. The move adds more businesses to a Wilmington-based specialty products segment from the Michigan-based materials science spin-off.

Plans call for DowDuPont to be spun off into three publicly traded companies.

The company announced “that, in light of knowledge gained since the announcement of the transaction, certain targeted adjustments will be made between the Materials Science and Specialty Products divisions, which will enhance the competitive advantages of the intended resulting companies. The changes better align these businesses with the end-markets they serve, ensuring clear focus, market visibility, targeted innovation and stronger growth profiles, and better equip each to compete successfully as industry leaders.”

DowDuPont had engaged consultants to study the business alignment. This also came after shareholder activists at Dow pressed for selling off more businesses at the combined company.

Advertisement

U.S. Sen. Tom Carper offered the following statement:

“DuPont has been an important and beloved part of the Delaware community for hundreds of years, and the news that it would merge with Dow made many of us question whether that longstanding relationship would continue.Over the past fewmonths, there was a growing concern that a group of company stakeholders who did not appreciate that deep connection to the First State would jeopardize the future of DowDuPont’s Specialty Products business.

Caper continued, “However,it appears the announcement today indicates that future is bright.Iam very encouraged that DowDuPont is making a huge investment in its Specialty Products business here in Delaware, andIam hopeful it will help drive the economy throughout our region.There’s more to learn in the days ahead, but this is very welcome news.

Reuters reported the plan received the backing of Nelson Peltz, the DuPont activist investor who helped trigger the merger with Dow.

The realignments will move the following businesses to the Delaware-based Specialty Products Division from the Materials Science Division.

  • Dow’s Automotive Systems’ adhesives and fluids platforms
  • Dow’s Building Solutions business
  • Dow’s Water and Process Solutions business
  • Dow’s Pharma and Food Solutions business
  • Dow’s Microbial Control business
  • DuPont’s Performance Polymers business
  • Several silicones-based businesses aligned with applications in industrial LED, semiconductors, medical, as well as Molykote®brand lubricants for automotive and industrial equipment and Multibase Inc, which provides solutions for the thermoplastic compounding industry

The Specialty Products Division accounts for total net sales of more than$8 billion.

“The changes we are making will enhance the competitive advantages and value creation potential of DowDuPont and ensure that the intended companies have the best possible foundation to drive long-term value for all stakeholders,” saidEd Breen, chief executive officer of DowDuPont. “The facts clearly supported the strategic logic of this portfolio configuration. Each of the intended companies will have even stronger competitive positioning, high value-added customer solutions, and a distinct and compelling investment thesis, while maximizing opportunities for strategic growth and synergies. With clear focus, each will serve attractive and growing markets, investing in innovation and delivering greater returns for shareholders.”

DowDuPont confirmed its previously announced plans to achieve cost savings of approximately$3 billionand approximately$1 billionin growth synergies.

Following the portfolio realignments, the three intended companies of DowDuPont are as follows:

  • An agricultureal company that brings together the strengths of DuPont Pioneer, DuPont Crop Protection and Dow AgroSciences. increase their productivity and profitability. The intended company will be headquartered inWilmington, Delaware, with global business centers inJohnston, Iowa, andIndianapolis, Indiana.
  • A materials science company that will be the premier materials science solution provider, with the vast majority of its sales aligned with three narrower and deeper, high-growth market verticals: packaging, infrastructure and consumer care.

The planned company will consist of three powerful, market-leading segments:

  • Performance Materials & Coatings.
  • Industrial Intermediates & Infrastructure.
  • Packaging & Specialty Plastics.

The planned company will maintain the Dow brand and will be headquartered in its hometown of Midland, Michigan.

  • A specialty products company with the following segments:
    • Electronics & Imaging
    • Transportation & Advanced Polymers.
    • Safety & Construction
    • Nutrition & Biosciences

The planned company will be headquartered inWilmington.

Facebook Comments
Advertisement
SHARE
Previous articleLegislation gives local government more tools in combating housing blight
Next articleLaw firm that represents big media clients in 1st amendment cases merges with Ballard Spahr

Delaware Business Now is a four-year-old, five-day-a-week newsletter and website operated by Bird Street Media LLC. Publisher and Chief Content Officer is Doug Rainey, a 30-year veteran of business journalism in the state of Delaware. 

Business Now focuses on breaking business news in Delaware and immediate adjacent areas with apropriate background and perspective. Also offered exclusively in our FREE newsletter is commentary on state and regional issues.

Have a complaint, question or even a compliment? Send an email to drainey@delawarebusinessnow.com.

For advertising information, click on the About tab at the top of the home page Our business hours are 8 a.m. to 5 p.m., Monday through Friday. Call us at 302.753.0691.

Advertisement