Farm Progress

Site structure announced for Ag company from Dow-DuPont merger

The two companies are moving forward with their mega-merger strategy ahead of regulatory reviews, noting how the new ag company will be structured.

February 19, 2016

3 Min Read
<p>Johnston, Iowa will become a Global Business Center under the new independent Agriculture company (to be named later) created by the Dow Chemical/DuPont merger.</p>

When the Dow Chemical and DuPont merger was announced, a key factor was the creation of three divisions - agriculture, specialty chemicals and materials science. Key question? Where will those divisions be based, and what is the structure? For the agriculture division, there's some news.

The new corporate headquarters for the proposed independent Agriculture company will be Wilmington, Del. That’s been the home of DuPont for more than 200 years, and will be the headquarters for agriculture. However, the new company - when operating - will have two global business center sites - Johnston, Iowa, and Indianapolis, Ind. This preserves key ag research and development locations for the Pioneer brand (Johnston) and the Mycogen brand (Indianapolis).

That Wilmington home office will house the chief executive officer for the new company, and key corporate support functions. The Johnston and Indianapolis sites will serve as Global Business Centers, with leadership of the business lines, business support functions, research and development, global supply chain and sales and marketing capabilities concentrated in the two Midwest locations, according to the corporate release.

The independent Agriculture company will feature DuPont in its name following completion of the corporate naming and branding process. In a release announcing this strategy, Edward D. Breen, chairman and CEO of DuPont comments: "This efficient structure takes full advantage of the unique expertise and resources that exist in each location, enabling us to deliver the long-term opportunity for the leading global Agriculture company we intend to create. Our deep presence in Iowa and Indiana will continue the close ties to our customer base and the broader Agriculture community, while leveraging the existing corporate infrastructure and expertise we have in Delaware – DuPont’s home for more than 200 years.”

Noting synergies

The media statement notes that the structure of the Agriculture company is designed to ensure cost discipline and efficiency necessary to hit that $1.3 billion in synergies, while establishing "the strongest foundation possible for sustainable growth" over the long term. The new structure will enable the intended independent Agriculture company to combine DuPont's and Dow's ag capabilities across seed and crop protection in three primary locations.

Andrew N Liveris, chairman and CEO of Dow adds: "The proposed combination of Dow’s and DuPont’s agricultural businesses will create a U.S.-based global leader with the scale and breadth necessary to deliver greater value and choice for growers worldwide and compete against the largest global competitors. Combining each company’s strengths in science and R&D, with increased global market access, enables greater opportunity for innovative new solutions in both seed and crop protection. The headquarters location of the Agriculture company being announced as Wilmington, with global business centers in Indiana and Iowa is consistent with the intended headquarters of the Material Science company, to be named Dow, being headquartered in Midland, Michigan, but having global business centers in other U.S. and global locations."

Breen notes that this announcement is "another step toward our creation of a leading global agriculture company. The intended Agriculture company will be highly focused, more competitive, more resilient and better equipped to deliver growth and long-term, sustainable value than either DuPont or Dow could deliver on its own."

Both parties continue to plan for the closing of the transaction during the second half of 2016, subject to satisfying the necessary closing conditions including obtaining the required pre-merger regulatory approvals.

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