Dow and DuPont agree to $US 130 billion mega-merger

Dow Chemical and DuPont have agreed to a merger, with the combined entity then splitting into three companies in the next 18 to 24 months.

As reported last Friday, the two US chemical giants had been in advanced-stage merger talks last week. The all-stock merger had been under consideration “since at least February”according to Bloomberg.

Assuming it gains regulatory approval, the new company will see Darwin-born Andrew Liveris of Dow as the new executive chairman, with DuPont’s CEO Ed Breen the new CEO.

"This transaction is a game-changer for our industry and reflects the culmination of a vision we have had for more than a decade to bring together these two powerful innovation and material science leaders," said Liveris in a statement.

The Wall Street Journal reports that $3 billion on costs would be saved. The new company will have dual headquarters in Midland, Michigan, and Wilmington, Delaware.

Dow shareholders will get one share in DowDuPont per each Dow share, with DuPont shareholders getting 1.282 shares per each of their current shares.

The three spinoff companies will cover commodity chemicals and plastics, specialty chemicals, and agricultural products.

The Financial Times notes that the new company would be worth $US 130 billion, based on Friday’s share prices, realise an estimated extra $US 30 billion in value through the merger, and have a combined net debt of $US 18 billion.

 

To keep up to date with Australian Mining, subscribe to our free email newsletters delivered straight to your inbox. Click here.