DuPont and Dow are a step closer to a merger and subsequent three-way split of businesses.
As expected, shareholders of both companies approved the merger that will create a company that will be briefly known as DowDuPont, with a subsequent split-up that will take place over a couple of years.
The companies expect the merger transaction to close in the second half of 2016, subject to customary closing conditions, including regulatory approvals. So far, no barriers to the deal have popped up.
Ed Breen, chair and chief executive officer of DuPont, stated: “We are pleased to receive such strong support from our stockholders, which represents an essential milestone in the combination of our two companies and our intention to subsequently separate into three independent companies. We are now focused on important next steps toward completing the merger transaction, including working with regulators in the appropriate jurisdictions. We are confident that this merger will create long-term, sustainable value for stockholders and superior solutions and choices for customers.”
Following the completion of the merger, the combined company will pursue the separation of the combined company’s Agriculture business, Material Science business and Specialty Products business into three independent, publicly traded companies, subject to approval by the DowDuPont board and receipt of any required regulatory approvals.
Two of the companies will be based in Delaware, including agriculture, a key driver of the merger will be based in Delaware. Two collections of businesses that are not as sharply focused – material science and specialty products – will be based in Michigan and Delaware respectively.
All three will be publicly traded companies.
The agriculture deal that came during a downturn in that business is shaking up the corporate landscape, with rival Monsanto facing a takeover offer from German chemical and pharma giant Bayer.
Delaware has seen a loss of 1,700 jobs, many in research, as part of a cost-cutting plan that was instituted by Breen before the merger. Total employment by the various operations could settle in at 5,000, although more cuts are possible.
A quarter of a century ago, DuPont employment upwards of 25,000 in Delaware.
The final voting results on all agenda items for each company’s special meeting will be filed with the SEC in separate Form 8-Ks and will also be available at http://www.dow.com/en-us/investor-relations/financial-reportingand http://investors.dupont.com, respectively, after certification by each company’s inspector of elections.
