DuPont Co. boosted its 2016 earnings outlook amid global cost cutting and increased sales volumes while cautioning that its historic merger with Dow Chemical Co. probably won’t meet a year-end completion target.

The $59 billion combination of the two largest U.S. chemical makers probably will close by the end of March, rather than the previous goal of December, as antitrust regulators extend their scrutiny of the deal, Chief Executive Officer Ed Breen said in a statement Tuesday. Dow Chemical CEO Andrew Liveris yesterday told Bloomberg the deal may not close until February due to the European Union’s concerns about business concentration in the farming sector.

 “We continue to work constructively with regulators in key jurisdictions to close the merger as soon as possible,” Breen said in the statement. “In the event that regulators in those jurisdictions use their full allotted time, closing would be expected to occur in the first quarter of 2017.”

DuPont’s adjusted earnings for this year will reach $3.25 a share, from a prior range of $3.15 to $3.20, the company said in the statement, topping the $3.19 average estimate of 21 analysts in a Bloomberg survey. In the third quarter, adjusted earnings climbed to 34 cents a share, beating the average estimate of 21 cents. Revenue was $4.92 billion, exceeding the estimated $4.87 billion.

Breen is eliminating 10% of DuPont’s workforce as part of a plan to reduce annual expenses by $700 million. The savings, combined with a 3% higher sales volume, helped widen pretax profit margins in DuPont’s six business segments by an average of 3.5 percentage points, with gains realized in each one.

Breen is a “good operator, and all I’ve been hearing is how aggressively he’s been taking costs out of the system,” Hassan Ahmed, an analyst at Alembic Global Advisors who rates the shares neutral, said by telephone before the earnings report was released. “Every time he uncovers a stone, he finds ample more costs to cut.”

DuPont and Dow shareholders in June approved the 50-50 merger. The companies now are focused on winning antitrust clearance from regulators around the world. The European Commission this month delayed its decision deadline to Feb. 6 as it sought additional information about the transaction.

Regulators’ “greatest concern is agriculture,” Dow’s Andrew Liveris said Monday in an interview with Bloomberg Editor-in-Chief John Micklethwait in New York. “One of the strongest lobbies in the world out there is the farm lobby, and in Europe, the agricultural sector is very, very critical to them, somewhat protected.”

DuPont and Dow plan to slash another $3 billion in costs after completing the merger of equals. They plan 18 months later to split DowDuPont Inc. into three separate publicly traded entities, including an agriculture company that would be larger than market leaders Monsanto Co. and Syngenta AG. Those companies agreed this year to their own combinations, with Monsanto agreeing to be acquired by Bayer AG and Syngenta striking a deal to be bought by China National Chemical Corp.

To contact the reporter on this story: Jack Kaskey in Houston at [email protected]

To contact the editors responsible for this story: Brendan Case at [email protected]

Kevin Orland

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