Here's What Dow Chemical-DuPont Post-Breakup Might Look Likeby
Companies said to be talking about a merger, then 3-way split
Would create new companies in agriculture, specialty chemicals
A merger of DuPont Co. and Dow Chemical Co. would create a company with a market capitalization of about $120 billion and wide influence over an exceptionally broad chemicals market that ranges from genetically modified seeds to food packaging products and the fibers in bullet-proof vests.
The deal, according to people familiar with the plan, would be followed by a breakup of the company into three businesses: agriculture, specialty chemicals, and commodity chemicals. While further details have yet to emerge, here’s a look at what those three new companies would look like.
- Agricultural products:
- Both DuPont and Dow produce genetically modified seeds. DuPont’s most popular product is its corn seed. Dow supplies seed and herbicide.
- Combined, the new business would be the world’s largest seed and pesticide company, surpassing Monsanto Co.
- DuPont’s agriculture business accounted for $9.2 billion of revenue in the first nine months of 2015, or 41 percent of total sales, according to data compiled by Bloomberg. Dow’s unit had $4.8 billion of sales, for 13 percent of the total.
- Commodity chemicals:
- Both companies make plastics used for autos.
- DuPont, known for inventing nylon and Kevlar, which is used in bullet-proof vests, has sold off most of its commodity-chemical assets in recent years.
- Dow’s largest source of revenue in 2015 has been its performance plastics business, which generated $13.7 billion from sales of raw materials used in food packaging and shopping bags.
- Specialty products:
- Both companies produce materials used to make solar panels.
- DuPont is also known for its flame-resistant Nomex fiber and its Corian countertops. It also makes Tyvek “housewrap” used in construction. Dow has a similar product.