DuPont & Dow merge to form DowDuPont

18-Dec-15

The Board of Directors at DuPont and Dow Chemical Company unanimously approved a definitive agreement under which the companies will combine in an all-stock merger valued at US$130 mln. The combined company will be named DowDuPont. The parties intend to subsequently pursue a separation of DowDuPont into three independent, publicly traded companies through tax-free spin-offs. This would occur as soon as feasible, which is expected to be 18-24 months following the closing of the merger, subject to regulatory and board approval. The three spin offs will include a leading global pure-play Agriculture company; a leading global pure-play Material Science company; and a leading technology and innovation-driven Specialty Products company. Each of the businesses will have clear focus, an appropriate capital structure, a distinct and compelling investment thesis, scale advantages, and focused investments in innovation to better deliver superior solutions and choices for customers. Under the terms of the transaction, Dow shareholders will receive a fixed exchange ratio of 1.00 share of DowDuPont for each Dow share, and DuPont shareholders will receive a fixed exchange ratio of 1.282 shares in DowDuPont for each DuPont share. Dow and DuPont shareholders will each own approximately 50% of the combined company, on a fully diluted basis, excluding preferred shares. The transaction is expected to deliver approximately US$3 bln in cost synergies, with 100% of the run-rate cost synergies achieved within the first 24 months following the closing of the transaction. Additional upside of approximately US$1 bln is expected from growth synergies. The merger transaction is expected to close in H2-2016, subject to customary closing conditions, including regulatory approvals, and approval by both Dow and DuPont shareholders