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Dow and DuPont to merge, then split

Wilmington, DE and Midland, MI – DuPont and The Dow Chemical Company today announced an agreement to combine in what is dubbed an ‘all-stock merger of equals’. The combined company will be named DowDuPont and will have a combined market capitalization of approximately US$130 billion.

Following the merger, the new company will be divided into three independent, publicly traded companies through tax-free spin-offs. This is expected to occur 18-24 months following the closing of the merger, subject to regulatory and board approval. The separated companies will include an agriculture company; a material science company; and a specialty products company.

The agricultural company will unite DuPont’s and Dow’s seed and crop protection businesses. Combined pro forma 2014 revenue for agriculture is approximately $19 billion. The material science company will consist of DuPont’s Performance Materials segment as well as Dow’s Performance Plastics, Performance Materials and Chemicals, Infrastructure Solutions, and Consumer Solutions (excluding the Dow Electronic Materials business) operating segments. Combined pro forma 2014 revenue for material science is approximately $51 billion. The specialty products company will focus on businesses that share similar investment characteristics and specialty market focus, including DuPont’s Nutrition & Health, Industrial Biosciences, Safety & Protection and Electronics & Communications, as well as the Dow Electronic Materials business. Combined pro forma 2014 revenue for specialty products is approximately $13 billion.

Upon completion of the transaction, Andrew Liveris, president, chairman and CEO of Dow, will become executive chairman of the newly formed DowDuPont Board of Directors and Edward Breen, chair and CEO of DuPont, will become chief executive officer of DowDuPont.

“This transaction is a game-changer for our industry and reflects the culmination of a vision we have had for more than a decade to bring together these two powerful innovation and material science leaders,” said Liveris. “Over the last decade our entire industry has experienced tectonic shifts as an evolving world presented complex challenges and opportunities – requiring each company to exercise foresight, agility and focus on execution.”

The merger transaction is expected to close in the second half of 2016, subject to customary closing conditions, including regulatory approvals, and approval by both Dow and DuPont shareholders. Following the closing of the transaction, DowDuPont will be dual headquartered in Midland, Michigan and Wilmington, Delaware.