Dow DuPont update: Merger on track for August and review underway

Dow and DuPont have announced that the merger of the two companies is still on track to close in August 2017 and that a comprehensive review of their respective portfolios has commenced.

In a joint statement, the companies said that the portfolio review will use the knowledge gained since the intention to merge was announced in December 2015 to “capture any material value-enhancing opportunities” in preparation for the intended creation of three separate companies.

The lead independent directors of each company are working together to oversee the process. The DowDuPont Board is expected to review the results soon after the merger closes.

“The management teams and directors of both companies are in regular dialogue with our shareholders, and we have undertaken significant preparation work in advance of the close,” said Jeff Fettig, Lead Director of Dow.

“As a collective board we are committed to delivering maximum, long-term shareholder value by ensuring that each of the intended companies will have clear focus, an appropriate capital structure, a distinct and compelling investment thesis, scale advantages, and focused investments in innovation to better deliver superior solutions and choices for customers.”

The three independent, publicly traded companies will be in the areas of agriculture, materials science and speciality products.

Upon closing of the transaction, the combined company would have a market capitalisation of approximately $130billion (at announcement).

“Dow and DuPont leadership are committed to maximising the tremendous value creation potential of the merger and anticipated spins,” said Alexander (Sandy) Cutler, Lead Director of DuPont.

“Our review will provide an in-depth look at the portfolio mix and alignment across divisions to ensure we capitalise on all value-enhancing opportunities.

“The output of the review will be an immediate focus for the DowDuPont Board following merger close. If the results of our review demonstrate there is net greater long-term value creation to be realised through a change in the portfolio, it will be pursued."

The companies reaffirmed their expectation to close the merger in August 2017, with the intended spin-offs to occur within 18 months of closing.