Along with the mega-merger, DuPont announces plans to cut 10 percent of workforce and trim $700 million in costs.
Company officials confirmed the rumors that had circulated earlier this week that Dow Chemical and DuPont would be combined into one company to be known as DowDuPont.
“This transaction is a game-changer for our industry,” said Dow CEO Andrew Liveris. He said Dow has been looking at bringing the two companies together for more than a decade. “This merger of equals significantly enhances the growth profile for both companies.”
The new DowDupont would have a combined market capitalization of $130 billion. “Maybe this was a unique time in the history of both companies where we could pull this off,” said DuPont CEO Ed Breen. “We’ve created a very attractive path forward for our shareholders.”
While the merger is expected to close in the second half of 2016, the axe will fall at DuPont before then.
In a concurrent announcement to the merger, DuPont officials also unveiled a global cost savings and restructuring plan that will cut costs by $700 million compared to 2015. Those cuts include pink slips for 10 percent of DuPont workers worldwide. It’s not immediately clear how many of those job cuts will be in Delaware.
Delaware Governor Jack Markell said he talked to Ed Breen about the plans for DowDuPont. “We have talked about the great business environment in Delaware and the many talented scientists, engineers and business leaders who call Delaware home and who can be at the center of growth for the three new businesses,” Markell said in a statement. He added that the state will continue to tout the state’s assets to the combined company going forward.
“None of this, of course, is of any solace for the workers and families who will be affected by this transition. The state is committed to supporting those affected by DuPont’s cost cutting in Delaware,” Markell said.
The new DowDuPont will have dual headquarters in Michigan, where Dow is based, and in Wilmington, which has been home to DuPont for more than 200 years.
After the merger, the plans are for DowDuPont to separate into three independent companies: one focused on agriculture, another focused on material science, and the third focused on specialty products. “Each of these companies has an amazing history of science and innovation, and that will help drive an equally amazing future,” Breen said.
The merger is subject to regulator approval.