- Corporate merger leaves some concerned heritage will be lost
- Companies were long part of the fabric of two communities
Charlie Copeland is as du Pont as they come. Macauley Whiting is all Dow.
Now their two families -- American business dynasties with over 300 years of combined history -- are being thrust together in a $130 billion marriage between Dow Chemical Co. and DuPont Co. that will not only remake two bastions of U.S. industrial might but also, in ways large and small, reshape the legendary families behind them.
Copeland, 53, is one of about 4,000 du Pont descendants who have shepherded, and gained from, the family’s fortunes since E.I. du Pont first built gunpowder mills on the banks of the Brandywine River in Delaware in 1802. Whiting, 58, grew up in Midland, Michigan, where his great grandfather, Herbert Henry Dow, founded Dow Chemical in 1897.
Both men, and their extended families, are now contemplating what the merger between DuPont and Dow Chemical will mean -- for the companies, their communities and their families’ names and fortunes.
Copeland’s uncle was Lammot du Pont Copeland, who was chief executive officer in the 1960s. He grew up thinking DuPont would never leave Delaware, or his storied family’s grasp.
“DuPont was part of Delaware’s fabric, and the family’s fabric,” Copeland says.
Whiting grew up in Midland, Michigan, wanting to be a chemical engineer like his great-grandfather, the man who founded the company.
“Dow and Midland are almost synonymous,” he says.
Some nine generations have passed since E.I. du Pont came to Delaware from France. Over the years, as the company grew and thrived, the family’s ranks have included Pierre S. du Pont, who helped shape General Motors Co. as president and chairman beginning in the 1910s, and Pierre S. du Pont IV, who helped establish Delaware’s credit card industry as governor in the 1980s.
Then there was John E. du Pont, who in 1997 was convicted of killing an Olympic wrestler on his Pennsylvania estate -- and about whom the movie Foxcatcher was based.
By comparison, there’s only about four or five generations of Dows since Herbert Henry created his company in 1897, based on his method for extracting the element bromine from wells around Midland. Whiting recalls growing up in a "great family town" dominated by Dow. Then he headed east for college and discovered another family’s rich legacy.
"I studied in a du Pont chemistry building at Princeton,” he recalls.
After that, he relocated to Freeport, Texas, to work for Dow. He recalls the company as being stable at the time, but not growing very quickly. He soon itched to be part of something more dynamic and left after four years in 1982 to start his own enterprise.
He ultimately sold his company, a biomass energy producer called Decker Energy International, Inc., in 2012 and is now president of the Herbert H. and Grace A. Dow Foundation, a major benefactor in Michigan.
For Copeland, the idea of DuPont’s clout ever waning first took hold after college when he went to work for the company at a titanium-dioxide plant on the Gulf Coast of Mississippi. It was the late ’80s and the company was spending more than it brought in, he says.
“That’s when the downsizing, the selling off of businesses, the changing of portfolios started,” he says.
Copeland left after seven years in 1992 to start his own business. He’s now president of Associates International, Inc., a marketing and printing company. He served a stint in the Delaware state senate and is currently chair of the state’s Republican Party.
This summer, the Dows held a family reunion in Midland and about 100 of the roughly 180 living descendants of Herbert and Grace Dow attended, Whiting says. They had events at the founder’s old estate and at the minor league baseball stadium that Dow Chemical and the Herbert and Grace Dow foundation helped pay for a decade ago.
It was around then that Whiting first heard rumors that Dow might be looking to sell or merge its agricultural business, he says. But he didn’t expect the whole company to be part of a deal.
Plenty of Surprises
For Copeland, the seven months since former DuPont CEO Ellen Kullman defeated activist investor Nelson Peltz of Trian Fund Management in a proxy battle have brought plenty of surprises. He never expected Kullman to leave the company so fast, but then she did in October. The deal was announced two months later.
Dow and DuPont announced the all-stock merger of equals Friday morning, calling it the first step in a plan to create three new businesses focused on agriculture, commodity chemicals and specialty products. The agreement will lead to $3 billion in cost savings, the companies said.
It culminated two years of pressure from activist investors who argued that shareholders of both companies would realize greater value if they were broken up.
The experience reminds Copeland of an article he read about how American corporate culture in recent years has focused more on cost cutting than growth, he says.
“Now, with DuPont potentially eliminating the last vestiges of its last footprint here, the impact on a small state like Delaware is potentially catastrophic,” he says.
Whiting has similar misgivings.
“This merger is really good news for Wall Street and for stockholders,’’ he says. “I hope it will also be good news for the Midland community.”