Sponsored By
Farm Futures logo

Dow, DuPont announce 'site structure' for independent ag company 137751Dow, DuPont announce 'site structure' for independent ag company

The wheels are turning as the mega-merger between the two ag companies plays out.

February 19, 2016

5 Min Read

DuPont and Dow Chemical released information today regarding the structure for the future independent agriculture company that will be the result of the merger of the two firms. As previously reported, the two firms will merge then create three divisions - agriculture, specialty chemicals and materials science. Today the two firms announced what will happen with the ag side of the business.

What follows is information from the corporate release - there are some basic issues:

1 - Delaware will be corporate headquarters for agriculture with Iowa and Indiana serving as global business center.

2 - The independent company will be the "U.S. based global leader in agriculture"


3 - The new structure is consistent with the DowDuPont Strategic and Financial Objectives, including a stated $1.3 billion in ag company synergies.

4 - Headquarters for the Material Science company to be named Dow and the Specialty Products Company are reconfirmed as Midland, Mich., and Wilmington, Del. Respectively.

Corporate HQ for the ag business will be Wilmington, Del., the historic home for DuPont, and will include the office of the CEO and key corporate support functions. Johnston, Iowa - home of Pioneer DuPont; and Indianapolis, Ind., home of Dow AgroSciences; 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.

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.”

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.

Adds Breen: "We want to thank the leaders of each state for a highly constructive, cooperative process to achieve the best possible approach that leverages key advantages in each location. As we advance plans for the intended merger, DuPont and the state of Delaware are committed to leveraging our respective science infrastructures and competencies to nurture the emerging science and technology innovation hub in the state."

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."

Here's a look at the three intended independent, publicly traded companies - according to the corporate statement. Note all are 'intended' because the merger still must clear global regulatory authorities:

Agriculture Company: A leading global pure-play Agriculture company that unites the Seeds and Crop Protection businesses from DuPont and Dow. The combined entity is expected to have the most comprehensive and diverse portfolio in the industry and a robust pipeline with exceptional growth opportunities in the near-, mid- and long-term. The complementary offerings will provide growers across geographies with a broad portfolio of solutions and greater choice. The Agriculture company will be headquartered in Wilmington, Delaware. In addition, the independent Agriculture company will feature DuPont in the company’s name. 

Material Science Company: A pure-play industrial leader, consisting of Dow’s Performance Plastics, Performance Materials and Chemicals, Infrastructure Solutions, Consumer Care and Automotive Solutions (excluding the Dow Electronic Materials business) operating segments, as well as DuPont’s Performance Materials segment. The combination of complementary capabilities is expected to create a low-cost, innovation-driven leader that can provide customers in high-growth, high-value industry segments in packaging, transportation, and infrastructure solutions, among others, with a broad and deep portfolio of cost-effective offerings. The Material Science company will be headquartered in Midland, Michigan. In addition, the independent Material Science company will feature Dow in the company’s name.

Specialty Products Company: A leading global specialty business focused on attractive secular growth markets where innovative science capabilities offer a clear competitive advantage. The company is expected to be composed of four strong businesses which include DuPont’s Nutrition & Health, Industrial Biosciences, and Protective Solutions businesses as well as the integration of DuPont’s Electronics & Communications business with Dow’s Electronic Materials business unit. The Specialty Products company will be headquartered in Wilmington, Delaware. 

Prior to the intended separation into three independent companies, DowDuPont will be dual headquartered in Wilmington, Delaware and Midland, Michigan. 

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.

Source: Dow Chemical and DuPont

Subscribe to receive top agriculture news
Be informed daily with these free e-newsletters

You May Also Like