(modified and updated) Dow Chemical Co., situated in Midland, Mich., and DuPont Co., Wilmington, said Friday they're going to combine in a "tax-free merger" into one business, DowDuPont, after that separated the combination into three. They want to slice at the very least $3 billion in yearly expenditures, shut workplaces and flowers and lay-off thousands, in hopes of operating up share costs and enriching investors. DuPont merger declaration here.
DuPont in addition said Friday that, even before the merger, it will erase around 5, 400 of its 54, 000 global workers. CEO Edward Breen intends to cut $700 million from investing next year, and spend $650 million for layoff severance to 1000s of workers who will drop their jobs, plus $130 million for plant shutdowns. The businesses use around 100, 000 globally, very nearly 1/10th of whom work with the Philadelphia area (number at bottom). DuPont spending slices declaration here. In addition, Dow will absorb Dow Corning; statement here.
In remarks to investors, the bosses said they'd relied on advice from corporate raiders Daniel Loeb associated with Tri Point hedge fund group, which has 2% of Dow, and Nelson Peltz associated with the Trian hedge fund team, which owns 3% of DuPont, in creating the split-up, which they desire to conclude by belated 2017.
The in the offing cuts feature $300 million of this combined $3.6 billion per year the firms expend on analysis and development. Duplicate electronic devices factories tend to be among the list of facilities probably be closed, Breen stated.
The move joins two 100+-year-old firms that expanded wealthy building and acquiring substance patents, establishing procedures and products they sold to armies, farms, industrial facilities, families and governing bodies worldwide, employing thousands and thousands of specialists and competent employees, often producing harmful byproducts.
Dow employer Andrew N. Liveris, which told investors in a seminar telephone call these days he is already been trying "for over 10 years" to merge with DuPont, is the mixed corporations' Executive Chairman. DuPont's new CEO Edward D. Breen, who will hold that subject on combined businesses, cracked that he'd "coveted this bargain for about 8 weeks, " or since he got the top job at DuPont. But Breen in addition stated he and other DuPont directors also "looked at every other difference that there might be around the world" searching for profitable buyers, sellers and lovers.
Breen will oversee the 2 smaller for the three in the offing successor businesses before employing their particular CEOs; the biggest band of businesses will are accountable to Liveris and keep carefully the Dow title. The as-yet unnamed primary monetary officer for the combined companies will are accountable to Breen. Breen stated Dow and DuPont "fit collectively like hand and glove."
The three successor corporations:
- DuPont and Dow crop pesticides and genetically-modified seeds, with product sales totalling $19 billion, will unite into an "Agriculture" company under Breen's oversight
- DuPont's Performance components group should be collapsed into Dow's plastic materials, construction and customer businesses, creating a $51 billion "content research" business under Liveris' watch
- DuPont's diet and health, enzymes and biosciences, safety and security, and electronic devices and coummunications teams are joined to Dow's electronic materials business in a "Unique items" team under Breen.