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DowDuPont Adjusts Its Company Split

Tuesday, September 19, 2017

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Newly merged DowDuPont says it has completed a portfolio review of the three companies it had planned to spin off, and has decided to adjust the Materials Science and Specialty Products segments.

Ed Breen and Andrew Liveris
Images: DowDuPont

The DowDuPont merger closed Aug. 31; the new, merged entity will now begin the process of splitting into three separate, publicly traded businesses with more focused specialization.

The adjustments, which the company says are intended to better align the businesses with the relevant end markets, were approved based on several factors, such as: a review led by lead independent directors; a business and operation analysis of the incorporated information gained during 20 months of pre-planning; and input from stakeholders.

The DowDuPont merger closed Aug. 31; the new, merged entity will now begin the process of splitting into three separate, publicly traded businesses with more focused specialization.

Business Changes

Moving forward, DowDuPont will move the following businesses from the Materials Science Division to the Specialty Products Division:

  • Dow’s Automotive Systems’ adhesives and fluids platforms;
  • Dow’s Building Solutions;
  • Dow’s Water and Process Solutions;
  • Dow’s Pharma and Food Solutions;
  • Dow’s Microbial Control;
  • DuPont’s Performance Polymers; and
  • Several silicones-based businesses.

Based on the forecast for 2017, the businesses that will be switched to the Specialty Products Division have totaled net sales of more than $8 billion, along with operating EBITDA of around $2.4 billion, which includes 40 percent of the heritage Dow Corning EBITDA.

The adjustments to the original merger include: around $4 billion of net sales from the heritage Dow portfolio will be evenly split between Consumer Solutions and Infrastructure Solutions, and approximately $4 billion of net sales from the heritage DuPont Performance Polymers business will move to the Specialty Products segment.

Dow scientist

Units including Dow Building Solutions, DuPont's Performance Polymers and several silicones-based businesses will now be part of the Specialty Products division.

“Our DowDuPont Board is fully aligned and confident that these targeted portfolio adjustments are the right actions to take and will benefit all stakeholders over the long term,” said Andrew Liveris, executive chairman of DowDuPont, in a statement.

Ed Breen, chief executive officer of DowDuPont, noted that these changes will enhance competitiveness and value creation.

“The facts clearly supported the strategic logic of this portfolio configuration," Breen said. "Each of the intended companies will have even stronger competitive positioning, high value-added customer solutions, and a distinct and compelling investment thesis, while maximizing opportunities for strategic growth and synergies.

“With clear focus, each will serve attractive and growing markets, investing in innovation and delivering greater returns for shareholders.”

Company Alignments

Following the adjustments and realignments, the resulting companies are as follows:

  • The Agriculture Company, to be headquartered in Wilmington, Delaware, incorporates DuPont Pioneer, DuPont Crop Protection and Dow AgroSciences, with a portfolio that includes seeds, traits, crop chemicals and other solutions;
  • The Materials Science Company will maintain the Dow brand and be headquartered in Midland, Michigan, and will comprise Performance Materials & Coatings, Industrial Intermediates & Infrastructure and Packaging & Specialty Plastics; and
  • The Specialty Products Company will be headquartered in Wilmington, Delaware, as well, and will consist of Electronics & Imaging, Transportation & Advanced Polymers, Safety & Construction and Nutrition & Biosciences. 

   

Tagged categories: Business matters; Coatings raw materials manufacturers; Dow Building Solutions; Dow Chemical Company; DowDuPont; DuPont; Mergers

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