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Dow Chemical in Negotiation with DuPont for Merger

Published on 2015-12-10. Author : SpecialChem

Dow Chemical is in negotiation with DuPont for a proposed Merger. It is anticipated to be one of the largest deals in the chemicals industry.

Fig. 1: Dow Chemical in Negotiation with DuPont for Merger

An accord may be announced as soon as this week, said the people, who asked not to be identified because the information is private. After the merger, the company would break into two or three businesses because of regulatory and other issues, the people said. There’s no guarantee a deal will get done and talks may still fall apart.

Combined, the two companies would be one of the biggest chemical companies in the world.

The step discussed will be to break up the merged company into three businesses:

• agricultural chemicals
• specialty products
• materials

An announcement could come soon, these people added, while cautioning that talks were incomplete and could still collapse.

Dow and DuPont are among the best-known names in the chemicals business. Dow has produced a slew of plastics and agricultural chemicals, while DuPont claims innovations such as Kevlar and Teflon.

But, each company has come under attack from investors unhappy with its financial performance. 

In addition to agriculture, DuPont’s portfolio includes electronics and communication, advanced materials, and safety and protection.

Dow Chemicals’ portfolio is split into two groups: specialty and basic chemicals. The company has been focusing more on specialty chemicals, which carry higher prices, whereas basic chemicals are more commoditized. Dow is also more exposed to the volatility of the energy market.

Representatives from Dow and DuPont declined to comment.

Should the two sides agree on a deal, it would be a merger in what has already proved to be one of the most fruitful years for deal makers.

About DuPont

DuPont has been bringing science and engineering to the global marketplace in the form of innovative products, materials, and services since 1802. The company believes that by collaborating with customers, governments, NGOs, and thought leaders it can help find solutions to such global challenges as providing enough healthy food for people everywhere, decreasing dependence on fossil fuels, and protecting life and the environment.

About Dow

Dow combines the power of science and technology to passionately innovate what is essential to human progress. The Company is driving innovations that extract value from the intersection of chemical, physical and biological sciences to help address many of the world's most challenging problems such as the need for clean water, clean energy generation and conservation, and increasing agricultural productivity. Dow's integrated, market-driven, industry-leading portfolio of specialty chemical, advanced materials, agrosciences and plastics businesses delivers a broad range of technology-based products and solutions to customers in approximately 180 countries and in high-growth sectors such as packaging, electronics, water, coatings and agriculture. In 2014, Dow had annual sales of more than USD 58 billion and employed approximately 53,000 people worldwide. The Company's more than 6,000 product families are manufactured at 201 sites in 35 countries across the globe. References to "Dow" or the "Company" mean The Dow Chemical Company and its consolidated subsidiaries unless otherwise expressly noted

Written by : SpecialChem Editorial Team
Based on Information Displayed on www.wsj.com

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