Dow Chemical and DuPont say shareholders approved merger
Shareholders for agriculture and chemicals companies DuPont and Dow Chemical have approved their merger. After it's complete, the century-old companies plan to break up into three parts.
The companies held meetings where shareholders voted on the deal. Both Dow and DuPont were pushed by activist investors to break up or find other ways to revitalise their businesses. They agreed to merge in December in an all-stock deal valued at about US$62 billion.
They expect the combination to be official by the end of 2016, but regulators will still have to approve it.
Within two years, the company plans to split into three separate publicly traded companies. One company will focus on agriculture, one on material science, and one will make and sell specialty products.
DuPont and Dow Chemical were each founded in the 19th century. Their research has brought the world products ranging from Ziploc bags and Saran wrap, developed by Dow, to DuPont's Teflon coatings and Nylon and Kevlar fibres.
More recently, they have focused on agriculture because of growing global demand for food supplies. That's boosted sales of genetically engineered seeds, fertiliser, herbicides and pesticides. However in the last few years falling crop prices caused trouble for both companies.
Facing pressure from investors, Dow and DuPont made some moves to simplify its businesses. DuPont spun off performance chemicals business into a separate company called Chemours last year, while Dow Chemical sold its AgroFresh specialty chemical business and most of its chlorine business.
But those deals weren't enough for investors. DuPont CEO Ellen Kullman resigned in October, a few months after the company fought off a proxy challenge from a hedge fund.
The two sides have been eliminating staff and closing facilities as they get ready to combine. DuPont is laying off about 10 per cent of its staff worldwide, and last month Dow said it will cut 2,500 jobs. They say the merger will reduce their annual spending by US$3 billion.
Dow Chemical Co shares rose 77 cents to US$53.13 in afternoon trading, while shares of E.I. du Pont de Nemours and Company edged up 24 cents to US$67.73.