DuPont and Dow Chemical Company announced to merge to form DowDuPont

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Who: DuPont and Dow Chemical Company
What: Merged to form new company DowDuPont
When: 11 December 2015

The Board of Directors of DuPont and Dow Chemical Company on 11 December 2015 unanimously approved a definitive agreement to merge the two companies in an all-stock deal.

The merged company will be named DowDuPont and it will have a combined market capitalization of approximately 130 billion dollars at announcement.

Details of Agreement

  • Under the terms of the transaction, Dow shareholders will receive a fixed exchange ratio of 1.00 share of DowDuPont for each Dow share.
  • On the other hand, 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 percent of the combined company, on a fully diluted basis, excluding preferred shares.
    • The transaction is expected to deliver approximately 3 billion dollar in cost synergies, with 100 percent of the run-rate cost synergies achieved within the first 24 months following the closing of the transaction.
    • Additional upside of approximately 1 billion dollars is expected from growth synergies.
    • Andrew N Liveris will be named Executive Chairman and Edward D Breen will be named CEO of combined company.
    • Advisory Committees will be established for each business.

    Besides, the two companies also agreed to subsequently pursue a separation of DowDuPont into three independent, publicly traded companies through tax-free spin-offs.

    The companies 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.

    About the Companies

    DuPont is an American chemical company that was founded in July 1802 as a gunpowder mill by Eleuthere Irenee du Pont. Its present Chief Executive Officer (CEO) is Edward D. Breen.

    The Dow Chemical Company is an American multinational chemical corporation headquartered in Midland, Michigan, United States. It was founded in 1897 by Herbert Henry Dow. Its present CEO is Andrew N. Liveris.