DOW Dow Inc

By Jacob Bunge 

DuPont Co.'s merger with Dow Chemical Co. now appears likely to complete in the first quarter of 2017, later than initially hoped, as antitrust authorities scrutinize a spate of agricultural deals, DuPont's top executive said.

The additional time enables the companies to plan for a faster three-way split following the deal. "That's how I'm looking at it," said DuPont Chief Executive Ed Breen said on a conference call discussing the company's third-quarter results.

Dow and DuPont, which previously aimed to close the megadeal by the end of this year, are deep into discussions with antitrust enforcers in the U.S., Europe, Brazil and China. The companies aim to unite their vast portfolios of chemical fibers, crop seeds, building materials and electronic components to create an industrial behemoth worth about $122 billion.

After that, DowDuPont would break up into companies focused on agriculture, materials, and specialty products like enzymes and electronic components.

That deal, among the biggest struck in 2015, is among a wave of mergers that would reorder the $100 billion global market in seeds and pesticides.

Upon sealing their deal, DuPont and Dow now expect to be able to split the combined entity into three separate companies within 18 months, versus the 18 to 24-month range projected when the deal was announced, Mr. Breen said.

"The luxury of having this time now is that we can actually do a lot of the work, the carve-work and other things, for the separation now," Mr. Breen said.

The European Commission opened an in-depth probe of the deal in August, and last month suspended its deadline for reviewing the Dow-DuPont merger as it awaited further information from the companies. The EU resumed its review this month, setting a new date of Feb. 6, 2017 to complete the investigation.

Mr. Breen said merger reviews in other major countries where Dow and DuPont do business, including the U.S., Brazil and China, are roughly on pace with the European review.

Dow and DuPont have said overlap between their businesses is relatively limited, given their respective scopes.

As DuPont closes in on the one-year anniversary of its December 2015 deal agreement with Dow, executives said DuPont's cost-cutting efforts are paying off, and improving performance in some of its business units prompted the company to boost profit projections for the year. DuPont said Tuesday it now expects $3.25 a share in adjusted earnings this year, compared with its prior guidance range of $3.15 to $3.20.

In the September quarter, DuPont's agriculture sales rose 2% to $1.12 billion, as Brazilian farmers stepped up purchases of new DuPont seeds. Cost cuts, higher volumes and a $28 million benefit from currency helped offset lower local prices and higher product costs.

In the performance materials unit, sales also increased, lifted by growth in building materials and the Chinese auto market.

Over all, DuPont earned $2 million, compared with $235 million a year ago. On a per-share basis, the company broke even in the quarter, compared with a 26 cent-a-share profit in the year-earlier period.

Excluding certain items, the company earned 34 cents a share, up from 13 cents a year ago. Analysts surveyed by Thomson Reuters had forecast 21 cents a share.

Shares of DuPont were down 42 cents at $69.72.

--Joshua Jamerson contributed to this article.

Write to Jacob Bunge at jacob.bunge@wsj.com

(END) Dow Jones Newswires

October 25, 2016 11:51 ET (15:51 GMT)

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