Dow, DuPont Push Back Merger Date as Divestitures Begin
March 31 2017 - 7:16AM
Dow Jones News
By Austen Hufford
Dow Chemical Co. and DuPont Co. said their merger's end date was
being pushed back but added it was still on track as DuPont moved
forward with plans to divest assets, a condition of European Union
approval for the deal.
The companies now expect the deal to close in August 2017, after
being delayed by intense regulatory scrutiny. When the deal was
first announced in Dec. 2015, it was expected to close in the first
half of 2016.
Earlier this week, the European Union's competition watchdog
cleared the merger on the condition they sell parts of DuPont's
global pesticides business and associated research and development,
as well as Dow's acid copolymers and ionomers business.
Divestitures are commonly required in large deals to assuage
concerns over market power and consolidation within specific
markets and industries.
Following the EU decision, DuPont said Friday that it would sell
its pesticide assets to FMC Corporation for that company's health
and nutrition business and cash. FMC will buy DuPont's chewing pest
insecticide portfolio, its global cereal broadleaf herbicides and a
substantial portion of its global crop protection
research-and-development efforts. DuPont is getting FMC's
health-and-nutrition business and will also receive $1.2 billion in
cash.
In 2017, FMC expects the units it is buying to generate about
$1.5 billion in revenue. The health-and-nutrition business had 2016
revenue of $743.5 million.
Dow and DuPont said they still expect their merger to generate
about $3 billion of cost synergies and $1 billion of growth
synergies.
"Today's announced transaction enables us to satisfy the
European Commission's approval conditions, while maintaining the
strategic logic and value creation potential of our merger," DuPont
Chief Executive Edward Breen said.
Write to Austen Hufford at austen.hufford@wsj.com
(END) Dow Jones Newswires
March 31, 2017 07:01 ET (11:01 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
Dow (NYSE:DOW)
Historical Stock Chart
From Aug 2024 to Sep 2024
Dow (NYSE:DOW)
Historical Stock Chart
From Sep 2023 to Sep 2024