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OK, DowDuPont, So What's The Game Plan?

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OK, DowDuPont, So What's The Game Plan?
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DowDuPont's Guidance Looks Conservative And Could Be Raised Soon
Benzinga's Top Upgrades, Downgrades For September 19, 2017

After a five-month review, DowDuPont Inc (NYSE: DWDP) came back from the drawing board Tuesday with new restructuring plans.

The two-week-old firm, born of a $60 billion merger between Dow Chemical Co. and DuPont Co., had intended to fragment into three companies servicing distinct consumer segments: materials, specialty products and agriculture.

Activist investors Jana Partners LLC, Trian Fund Management LP, Glenview Capital Management LLC and Third Point LLC had stated concerns over the original breakup plan and pressured DowDuPont to reconsider its intentions for the silicone business of Dow Corning, which was to remain intact under the materials spinoff.

Under the new plan, the disputed portfolio will be divided between the materials and specialty products firms. Here is the latest breakdown:

Materials Science

The materials spinoff will retain all legacy Dow lines except Dow Corning operations better aligning with the chemicals division. These segments amount to $8 billion in revenue.

Under the name of “Dow,” the Michigan-based company will emphasize packaging, specialty plastics, performance materials and coatings, infrastructure and industrial intermediates, which together bring in $40 billion of annual revenue, according to Wall Street Journal sources.

Specialty Products

Focused on transportation, polymers, construction, nutrition, biosciences, and electronics and imaging, the future components of specialty chemicals now generate about $20 billion in combined revenue.

Under the latest plan, the division will include Dow Corning’s Building Solutions, Water and Process Solutions, Pharma and Food Solutions, Microbial Control, Performance Polymers and multiple silicones-based businesses, as well as the adhesives and fluids platforms of Automotive Systems.

Agriculture

The portfolio of DuPont Pioneer, DuPont Crop Protection and Dow AgroSciences accounts for about $14 billion in annual revenue. The unnamed division will be headquartered in Delaware and emphasize seeds, crop chemicals, treatments and agronomy and digital services.

Related Link: A Look Ahead At DowDuPont’s Catalysts Over The Next Year; Analyst Initiates At Buy

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Image Credit: By Brian Reading (Own work) [CC BY-SA 3.0 (http://creativecommons.org/licenses/by-sa/3.0) or GFDL (http://www.gnu.org/copyleft/fdl.html)], via Wikimedia Commons

Posted-In: dow chemical DuPont Glenview Capital ManagementNews Commodities M&A Top Stories Markets Best of Benzinga

 

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