Reports have surfaced from ‘people familiar with the matter’ that chemicals giants DuPont and Dow are in talks to merge – with some saying an announcement is due this week
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According to news agency Reuters, those quoted say the company may potentially split into three business units: material science, specialty products and agrochemicals.
Reuters also states that Dow chief executive Andrew Liveris, and his DuPont counterpart Edward Breen would have the two top jobs in the new company if the merger goes ahead. Reuters’ source also reportedly said that “an agreement could be reached in the coming days”.
Writing on Fortune.com, Fortune senior editor Stephen Gandel said any potential merger is the result of poor returns for both sides in recent times: “The problem was returns. Never mind that the global chemical and agricultural businesses of Dow and DuPont are being dragged down by a slow world economy, and a strong dollar. The market wasn’t prepared to wait.”
Gandel also speculates that “Along the way there will probably be plenty of cost cutting and layoffs. It will also likely mean a reduction in research spending for both companies. That’s sure to produce better short-term returns, especially for DuPont.”
Twitter reaction
CNBC’s David Faber tweeted: “Dow Chemical and DuPont expected to announce merger of equals by Thursday. Plan to then split merged company into three companies-sources”
Meanwhile Greg Mulholland, founder of materials science group Citrine Informatics tweeted: “Dow and DuPont merge, then split. Big moves in materials industry, huge opportunities for materials innovation.”