News

Dow-DuPont Merger Could Take Longer

04.03.2016 -

Despite recent reports of progress in aligning production segments and geographic locations, the merger of Dow and DuPont may not take shape as fast as the future partners originally proposed.

In announcing the plans in late 2015, the two chemical giants said they expected the new entity, DowDuPont, to be incorporated by the end of 2016 before it is split into three units within three years’ time.

Both of the companies now have received requests for additional information and documentary materials from the US Department of Justice Antitrust Division regarding the merger, which they acknowledge could delay closure of the deal.

Without being specific about what information has been requested, Dow and DuPont told US media they had anticipated the requests and will respond promptly.

Meanwhile, the future partners have outlined details of financial remuneration of top executives in a filing with the US stock market watchdog Securities and Exchange Commission (SEC).

Under the terms, Dow CEO Andrew Liveris, who will become executive chairman of the merged company, will receive $52.8 million in cash, stock and tax reimbursement payments if he leaves on schedule in 2017, while DuPont CEO Edward Breen will receive $27 million if he leaves the company by early 2017.

Among other details, the document shows that Breen has accumulated DuPont stock options worth $7 million, which could be worth much more if the merger and breakup plan succeeds in significantly boosting share values. Commentators noted that Liveris, after 10 years at the Dow helm, would have received about $13 million less without the merger.

The SEC filing also reveals that Ellen Kullman, DuPont’s former CEO, held discussions with Dow about a merger in November 2014, nearly a year before stepping down under pressure from an activist investor in October 2015. Breen continued the talks following Kullman’s departure.

The filing reveals also that DuPont’s board in 2015 heard investment bankers’ proposals that included, alongside the mega merger with Dow – with or without a post-merger separation – the combination of the two companies’ agricultural chemicals business or DuPont’s acquisition of another agrochemicals producer. The parties involved were not named.