Dow Chemical-DuPont Merger May Be Delayed Until 2017

Dow Chemical-DuPont Merger May Be Delayed Until 2017

The $59-billion merger between Dow Chemical Co. and DuPont Co. may be delayed as European antitrust officials take more time to consider potential competition issues in pesticides and crop seeds.

October 31, 2016

The $59-billion merger between Dow Chemical Co. and DuPont Co. may be delayed as European antitrust officials take more time to consider potential competition issues in pesticides and crop seeds.

The $59-billion merger between Dow Chemical Co. and DuPont Co. may be delayed as European antitrust officials take more time to consider potential competition issues in pesticides and crop seeds.

Dow’s Chief Executive Officer Andrew Liveris told Bloomberg News that the European farm lobby is one of the strongest in the world and that the merger may be delayed until February.

The plan was originally planned to close late this year.

Meanwhile, DuPont is planning to sell a business making herbicides to help reduce potential antitrust sticking points. DuPont CEO Edward Breen said he expects the deal to close by the end of March.

Upon sealing their deal, DuPont and Dow now expect to be able to split the combined entity into three separate companies within 18 months, versus the 18 to 24-month range projected when the deal was announced, Breen told the Wall Street Journal.

A host of competitors from BASF to FMC Corp. are monitoring opportunities to pick up assets as the biggest-ever wave of consolidation in the agrochemical and seeds business spurs antitrust reviews and forced sales, according to USAgNet.

DuPont boosted its 2016 earnings outlook amid global cost cutting and increased sales volumes, according to Bloomberg. Dow will report financial results Oct. 27.

Breen is eliminating 10 percent of DuPont’s workforce as part of a plan to reduce annual expenses by $700 million.

The merger, agreed on in December, would create a company with a combined market cap of about $122 billion before splitting it up into three separate entities focused on plastics and chemicals, agricultural seeds and pesticides, and specialty products like food ingredients and safety equipment.

Sources:

The Wall Street Journal

Bloomberg.