DowDuPont Announces Results of Review

MIDLAND, MI and WILMINGTON, DE | DowDuPont (http://www.dow-dupont.com/home/default.aspx) reports that its board of directors and management, with the assistance of independent advisors, have completed their comprehensive review of the portfolio composition of three intended independent companies. The board unanimously concluded that, in light of knowledge gained since the announcement of the transaction, certain targeted adjustments will be made between the Materials Science and Specialty Products divisions, which will enhance the competitive advantages of the intended resulting companies. The changes better align these businesses with the end-markets they serve, ensuring clear focus, market visibility, targeted innovation, and stronger growth profiles, and better equip each to compete successfully as industry leaders.

As a result of a comprehensive analysis, DowDuPont will realign the following businesses to the Specialty Products Division from the Materials Science Division:

  • Dow’s Automotive Systems’ adhesives and fluids platforms
  • Dow’s Building Solutions business
  • Dow’s Water and Process Solutions business
  • Dow’s Pharma and Food Solutions business
  • Dow’s Microbial Control business DuPont’s Performance Polymers business
  • Several silicones-based businesses aligned with applications in industrial LED, semiconductors, medical, as well as Molykote brand lubricants for automotive and industrial equipment and Multibase, which provides solutions for the thermoplastic compounding industry.

On a forecasted 2017 basis, the businesses that will be realigned to the Specialty Products Division account for total net sales of more than $8 billion and operating EBITDA of approximately $2.4 billion, including approximately 40% of the heritage Dow Corning EBITDA. Relative to the original merger agreement, the adjustments are as follows: approximately $4 billion of net sales from the heritage Dow portfolio, evenly split between the Consumer Solutions and Infrastructure Solutions segments; and approximately $4 billion of net sales from the heritage DuPont Performance Polymers business moving to the Specialty Products Division.

Andrew Liveris, executive chairman of DowDuPont, says,” We built on the wealth of knowledge gained as both companies advanced our integration work together. These adjustments are also fully supported by the Materials Science Advisory Committee, as they better align select businesses with the market verticals they serve, while maintaining integration and innovation strengths within strategic value chains. As a result, both our Materials Science and Specialty Products divisions will be well-positioned to better anticipate and meet customer needs through focused innovation and technology development that will deliver accelerated growth from a broader suite of best-in-class products.”

“The changes we are making will enhance the competitive advantages and value creation potential of DowDuPont and ensure that the intended companies have the best possible foundation to drive long-term value for all stakeholders,” says Ed Breen, CEO of DowDuPont. “The facts clearly supported the strategic logic of this portfolio configuration. 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.”

DowDuPont reiterates its previously announced plans to achieve run-rate cost synergies of approximately $3 billion and approximately $1 billion in growth synergies.

Following the portfolio realignments, the three intended companies of DowDuPont are as follows:

  • An Agriculture Company to be headquartered in Wilmington, DE, that brings together the strengths of DuPont Pioneer, DuPont Crop Protection and Dow AgroSciences to better serve growers around the world with a superior portfolio of solutions (seeds, traits, crop chemicals, seed treatment, agronomy and digital services), ensuring greater choice and competitive price for value.
  • A Materials Science Company with the vast majority of its sales aligned with three narrower and deeper, high-growth market verticals: packaging, infrastructure, and consumer care. With one of the strongest and deepest toolkits in the industry, the intended company will have robust technology and asset integration, scale and competitive capabilities to enable truly differentiated materials science solutions for customers. The intended company will consist of three segments: Performance Materials & Coatings; Industrial Intermediates & Infrastructure; and Packaging & Specialty Plastics.

The intended company will maintain the Dow brand and will be headquartered in Midland, MI.

A Specialty Products Company including the following: Electronics & Imaging; Transportation & Advanced Polymers; Safety & Construction; and Nutrition & Biosciences.

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