Dow, DuPont conclude mega merger, cost synergy seen

Dow Chemical Co and DuPont, the two largest US chemical companies, today announced the completion of their merger and the new combined company is now called DowDuPont.
The plan to merge the two companies was announced in December 2015.
DowDuPont, a public holding company, will break into three separate independent companies focusing on agriculture, materials science and specialty products. Post merger, the combined market cap was projected at USD 130 billion.
Shares of Dow and DuPont ceased trading at the close of the New York Stock Exchange yesterday and shares of DowDuPont are slated for trading on the NYSE today.

"Today marks a significant milestone in the storied histories of our two companies. We are extremely excited to complete this transformational merger," DowDuPont Executive Chairman Andrew Liveris said in a statement.
As per the merger agreement, Dow shareholders received a fixed exchange ratio of 1 share of DowDuPont for each Dow share, and DuPont shareholders received a fixed exchange ratio of 1.282 shares of DowDuPont for each DuPont scrip.

The new combined entity said the transaction is expected to result in run-rate cost synergies of approximately USD 3 billion and the potential for approximately USD 1 billion in growth synergies.

"The company expects to reach 100 per cent run rate on the cost synergies within the first 24 months of merger closing," it added.
DowDuPont said its board comprises 16 members - eight directors each from the two merged companies.
DowDuPont CEO Ed Breen said: "With the merger now complete, our focus is on finalising the organisational structures that will be the foundations of these three intended strong companies and capturing the synergies to unlock value."
With clear focus, market visibility and more productive R&D, each intended company will be equipped to compete successfully as an industry leader, he hoped.

The DowDuPont board has established three advisory panels to oversee the setting up of each of the three independent companies and will develop a capital structure as per the bylaws and designate the future CEO and leadership team of its respective intended company.
Dow is headquartered in Midland and DuPont is based in Wilmington Delaware. The two firms have presence in India also.