Sector News

Dow and DuPont reviewing post-merger split plans

June 29, 2017
Chemical Value Chain

Dow Chemical and DuPont announced on 29 June that they have engaged McKinsey & Co. to assist in reviewing the composition of the three companies they intend to spin-off following the closure of their merger.

In a joint statement, the companies said both boards support a “comprehensive portfolio review for DowDuPont.” The review is “intended to assess current business facts and leverage the knowledge gained over the past year and a half to capture any material value-enhancing opportunities in preparation for the intended creation of three industry-leading companies.” The companies reaffirmed their expectation to close the merger by the end of August, with the separation into three independent, pure-play companies also expected to occur within the original timeline of 18 months post-close. These companies will include a materials science company, an agriculture company, and a specialty products company.

Wednesday’s announcement comes less than a month after activist hedge fund Third Point (New York), led by investor Dan Loeb, called for the companies to shift several “high-multiple” businesses from their planned materials science spin-off into the planned specialty products company. Third Point argues that the change could create $20 billion in additional value by shifting high-multiple businesses into more focused companies that it thinks will trade at premium multiples. Third Point says the planned specialty products spin-off could be further split into as many as four public companies.

“Our review will provide an in-depth look at the portfolio mix and alignment across divisions to ensure we capitalize on all value-enhancing opportunities. The output of the review will be an immediate focus for the DowDuPont Board following merger close,” says Alexander Cutler, lead director of DuPont and former chairman and CEO of Eaton Corporation.

Jeff Fettig, lead director of Dow, and chairman and CEO of Whirlpool, adds that the collective board is committed to ensuring that each of the intended companies “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.

Additional details about the nature of the review were not disclosed.

By Rebecca Coons

Source: Chemical Week

comments closed

Related News

February 4, 2023

Eastman acquires performance films company Ai-Red Technology

Chemical Value Chain

Eastman Chemical Co. (Kingsport, Tenn.) announced it has acquired Ai-Red Technology (Dalian) Co., Ltd., a manufacturer and supplier of paint protection and window film for auto and architectural markets in the Asia Pacific region.

February 4, 2023

BASF and StePac partner on chemical recycling MAP packs to fight food waste

Chemical Value Chain

BASF and Israeli packager StePac have joined forces to create the “next generation” of fresh produce packaging. BASF will provide StePac with greater flexibility to advance contact-sensitive packaging formats to a higher sustainability standard by supplying StePac with Ultramid Ccycled – a chemically recycled polyamide 6.

February 4, 2023

TotalEnergies and Intraplás partner on food-grade renewable biopolymer production

Chemical Value Chain

TotalEnergies’ biorefinery in La Mède, France, allows direct access to renewable feedstock for its drop-in RE:newable polymer range derived from bio-based products. The company claims these polymers retain virgin-like properties.

How can we help you?

We're easy to reach