Dow Chemical and DuPont reached an agreement Friday to combine operations into a single company that eventually will split into three.
The new company, which will be known as DowDuPont, will have a combined value of $130 billion upon passing regulatory review, making it one of the largest business mergers ever.The eventual split into three separate and publicly traded companies is expected to result in businesses concentrating on agricultural products, material science and specialty products. Such a split is expected to take up to two years to complete. Until then, shareholders of each company will hold 50 percent of the combined giant.
Dow's chief executive Andrew Liveris will be executive chairman of the new company, with DuPont chief executive Edward Breen keeping the CEO title. DowDuPont will have dual headquarters in Midland, Michigan, and Wilmington, Delaware.
The planned merger is the result of pressure from stockholders for both companies to become leaner and more profitable. For example, DuPont no longer manufactures paints and coatings, including the business that invented Teflon nonstick coating for cooking pans. Dow has gotten out of the business of marketing chlorine and epoxy products.
The deal, which will create the world's largest seed and chemical company, is expected to close in the second half of 2016.
- Compiled from wire reports.