DowDuPont has successfully completed the merger of equals between The Dow Chemical Company (“Dow”) and E.I. du Pont de Nemours & Company (“DuPont”), effective August 31, 2017. The combined entity is operating as a holding company under the name “DowDuPont” and with three divisions: Agriculture, Materials Science and Specialty Products.
DuPont and Dow shares closed on the New York Stock Exchange (NYSE) on August 31, 2017. Starting today, DowDuPont will begin trading on the NYSE under the symbol “DWDP.” In line with the terms set forth in the merger agreement, Dow shareholders received a fixed exchange rate of 1.00 DowDuPont shares for each Dow share and DuPont shareholders received a fixed exchange rate of 1.282 DowDuPont shares for each DuPont action.
“This day represents an important milestone in the history of both companies,” said Andrew Liveris, Executive Chairman of DowDuPont. “We are very happy to complete this merger and move towards the creation of three independent companies that are leaders in their markets. While the combined assets and strength of the two companies are impressive, the true value of this merger lies in the intended creation of three powerful companies that will influence markets and drive growth for the benefit of all their stakeholders. Our teams have been working on the integration plan for over a year and, starting today, we will begin executing these plans with the intention of completing the separations as quickly as possible.”
For shareholders, customers and employees, the completion of this merger represents a definitive step towards generating greater value and greater opportunities through a future built on sustainable growth and innovation,” comments Ed Breen, CEO of DowDuPont. “DowDuPont is a platform for the launch of three strong intended companies, which will be very well positioned to invest in Science and Innovation, help our customers solve important challenges and generate long-term returns for our shareholders. With the completion of the merger, our focus is on finalizing the organizational structures that will be the foundations of the three intended companies and capturing synergies to generate value. With clear objectives, market visibility and a more productive Research & Development structure, each intended company will be prepared to compete successfully as a market leader.”
DowDuPont's Board of Directors is made up of 16 members: eight are former directors of the DuPont Board and the rest are directors who were part of the Dow Board. There are two lead directors: Jeffrey Fettig, who served as Dow's lead independent director, and Alexander Cutler, a former independent director at DuPont. Andrew Liveris is the Chairman of the Board of Directors and Ed Breen also serves on the Board. Below is a list of the other members of the Board of Directors:
Dow:
o James A. Bell, former Chief Financial Officer of Boeing
o Raymond J. Milchovich, former chairman and CEO of Foster Wheeler AG
o Paul Polman, CEO, Unilever PLC and Unilever N.V.
o Dennis H. Reilley, Executive Chairman of Marathon Oil Corp.
o James M. Ringler, President of Teradata Corporation
o Ruth G. Shaw, former Public Policy executive and President of Duke Nuclear
DuPont:
o Lamberto Andreotti, former Chairman and CEO of Bristol-Myers Squibb Company
o Robert A. Brown, President of Boston University
o Marillyn A. Hewson, President and Chief Executive Officer, Lockheed Martin Corporation
o Lois D. Juliber, Vice President and Chief Operating Officer, Colgate-Palmolive Company
o Lee M. Thomas, Former President and CEO of Rayonier Inc.
o Patrick J. Ward, Chief Financial Officer of Cummins, Inc.
Three advisory committees were established by the DowDuPont Board of Directors to oversee the establishment of the Agriculture, Materials Science and Specialty Products divisions in preparation for the intended separation. Additionally, each Advisory Committee will develop a capital structure in line with the principles established in our Bylaws and will designate the future CEO and leadership team of each intended company.
As previously announced, DowDuPont will be led by a team that reflects the strengths and capabilities of both companies. Along with Liveris and Breen, there will be the following executives:
· Howard Ungerleider, Chief Financial Officer (CFO)
· Stacy Fox, General Counsel and Corporate Secretary
· Charles J. Kalil, Special Advisor to the President and General Counsel for the Division of Materials Science
· James C. Collins, Jr., Chief Operating Officer, Agricultural Division
· Jim Fitterling, Chief Operating Officer, Materials Science Division
· Marc Doyle, Chief Operating Officer, Specialty Products Division
By merging the highly complementary portfolios of Dow and DuPont and subsequently creating the intended lead companies, DowDuPont hopes to maximize value for its shareholders.
· Shareholders will benefit from a stronger and more focused investment profile from each intended company and substantial cost synergies, as well as from long-term growth and sustainable value creation following the intended separations into three companies. The transaction is expected to result in cost synergies of approximately $3 billion and the potential to achieve $1 billion in growth synergies. The company expects to achieve a 100% run rate on cost synergies within the first 24 months following completion of the merger.
· Customers will benefit from superior solutions and a wider product offering. By combining the complementary strengths of Dow and DuPont, each target company will be able to respond quickly and effectively to rapidly changing market conditions, meeting these demands through a greater number of more innovative products.
· Employees will benefit from being part of highly focused and competitive companies, created to grow sustainably in the long term, with great opportunities for businesses and people.
Leaders and integration teams at Dow and DuPont are developing the future operating models and organizational structure that will support each company's intended strategy. Once each division establishes its own processes, people, assets, systems and licenses to operate independently, DowDuPont intends to separate the divisions so that they will operate as their own legal entities, subject to approval by the Board of Directors and other regulatory approvals. The intended separations are expected to occur within 18 months.
The intended companies are expected to include:
· A Leading Agriculture Company that will bring together the strengths of DuPont Pioneer, DuPont Crop Protection and Dow AgroSciences to better serve farmers around the world, with a superior portfolio of solutions, greater choice and competitive value pricing. The combined capabilities and highly productive innovation engine will enable the intended agricultural company to bring an even broader set of products to market more quickly and can be an even better partner for farmers, delivering innovation and helping them increase their productivity and profitability. The intended agricultural company will be headquartered in Wilmington (Delaware, USA), with global business centers in Johnston (Iowa, USA) and Indianapolis (Indiana, USA).
· A Leading Materials Science Company, which will be called Dow and will consist of the businesses that make up the following current Dow segments: Performance Plastics, Performance Materials & Chemicals, Infrastructure Solutions and Consumer Solutions (Consumer Care and Dow Automotive Systems Dow Electronic Materials will be part of the Specialty Products business, as will DuPont's existing Performance Materials business. The intended Materials Science company will offer the strongest portfolio of chemicals and polymers in the industry, with the scale and competitive capabilities to enable the development of differentiated solutions for customers and high-growth markets, such as packaging, transportation, infrastructure and care. consumer. The intended Materials Science company will have its headquarters in Midland (Michigan, USA).
· A leading Specialty Products company that will be made up of strong, market-leading businesses, including DuPont Protection Solutions, Sustainable Solutions, Industrial Biosciences and Nutrition & Health; which will incorporate FMC's Health & Nutrition business, which is pending completion of the transaction. The company will also be formed by the Electronic Technologies business, which combines DuPont Electronics & Communication with Dow Electronic Materials. The intended Specialized Products company will be a leader in innovation made up of companies specialized in technology with differentiated products and solutions that transform industries and people's lives. The intended company will be headquartered in Wilmington (Delaware, USA).
As previously announced, DowDuPont's Board of Directors is conducting a detailed portfolio review to assess current business realities and leverage knowledge gained over the past year and a half to identify value-added opportunities in preparation for the creation of the intended industry-leading companies .
Klein and Company, Lazard and Morgan Stanley & Co. LLC have served as financial advisors to Dow on the transaction, with Weil, Gotshal & Manges LLP as legal advisors.
Evercore and Goldman, Sachs & Co. have served as financial advisors to DuPont for this transaction, with Skadden, Arps, Slate, Meagher & Flom LLP as legal advisors.
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