Nip Impressions logo
Thu, Mar 28, 2024 04:58
Visitor
Home
Click here for Pulp & Paper Radio International
Subscription Central
Must reads for pulp and paper industry professionals
Search
My Profile
Login
Logout
Management Side
Dow, DuPont Push Back Merger Date as Divestitures Begin

WILMINGTON, Del. (From news reports) -- Dow Chemical Co. and DuPont Co. again pushed back the time frame to finish their merger, but they said the deal is still on track as DuPont moved forward with plans for divesting assets to satisfy European regulators.

The companies now expect the deal, which has been delayed by intense regulatory scrutiny, to close in August 2017. When the pact was first announced in December 2015, it was expected to close in the second half of 2016. The companies' most recent target was the first half of this year.

Earlier this week, the European Union's competition watchdog cleared the merger on the condition they sell parts of DuPont's global pesticides business and associated research and development, as well as Dow's acid copolymers and ionomers business.

Following the EU decision, DuPont said Friday that it would sell its pesticide assets to Philadelphia-based FMC Corporation in exchange for that company's health and nutrition business and $1.2 billion in cash. FMC will receive DuPont's chewing pest insecticide portfolio, its global cereal broadleaf herbicides and a substantial portion of its global crop protection research-and-development efforts.

Divestitures are commonly required in large deals to assuage concerns over market power and consolidation within specific markets and industries.

The Dow-DuPont behemoth would serve as a vehicle for cutting costs before splitting into three separate businesses within two years after the deal closes. Those companies, each to be publicly traded, would focus on agriculture, material sciences and specialty products in nutrition and electronics.

On Friday, the companies said the first spun-off unit would be the material science company, expected within 18 months after closing. Dow and DuPont said they still expect their merger to generate about $3 billion of cost synergies and $1 billion of growth synergies.

FMC said the units it is buying will generate about $1.5 billion in revenue in 2017. The health-and-nutrition business had 2016 revenue of $743.5 million.


Printer-friendly format

 





Powered by Bondware
News Publishing Software

The browser you are using is outdated!

You may not be getting all you can out of your browsing experience
and may be open to security risks!

Consider upgrading to the latest version of your browser or choose on below: