Dow CEO Liveris May Delay Retirement to Complete DuPont Merger

  • ‘We are talking at the board level’ on the date, he says
  • Closing of deal has been slow as regulators weigh approval

Dow Chemical Co. is considering whether to retain Chief Executive Officer Andrew Liveris beyond his planned retirement this quarter so he can see through the $78 billion merger with DuPont Co.

The closing of the deal is now slated for August after being pushed back from the original 2016 timeframe because of slowness in winning antitrust approvals around the world. Liveris, who is also chairman, last year had said he would leave Dow “no later than the end of” the second quarter.

“With the delayed close, there has been an awful lot of dialog,” Liveris, 62, said on a conference call Thursday after Dow’s first-quarter earnings beat estimates. “We are talking at the board level and we will have something to say very soon.”

The two largest U.S. chemical makers agreed in 2015 that they would merge in the biggest-ever deal in the industry. The combined company would then split 18 months later into three publicly traded businesses focusing on seeds and pesticides, specialty products and materials such as plastics. The European Union last month gave conditional clearance to the transaction, which is still being weighed by regulators in countries including the U.S.

No Need

Liveris seems intent on staying involved with Dow and the merged company “significantly longer” and may interfere with the leadership of Ed Breen, the DuPont CEO who will retain that role at new DowDuPont Inc., Jonas Oxgaard, an analyst at Sanford C. Bernstein, said Thursday in a note to clients.

“There is no need to allow Mr. Liveris to taint the new DowDuPont company,” Oxgaard said. “We urge the Dow board to enforce the original promise.”

Dow’s first-quarter earnings rose to $1.04 a share, exceeding the 99-cent average of analyst estimates compiled by Bloomberg. It was the 14th consecutive quarter that earnings topped estimates for Midland, Michigan-based Dow. Sales climbed to $13.2 billion, topping the $12.5 billion average estimate.

“The beat is overshadowed by Mr. Liveris potentially reneging on his promise to shareholders to leave the company on June 30,” Oxgaard said. 

Dow fell 1.5 percent to $63.36 at 12:32 p.m. in New York. DuPont declined 1.4 percent to $80.48.

When the chemical makers announced their agreement to combine, Liveris had said he would serve as executive chairman of the new company. Rachelle Schikorra, a Dow spokesman, didn’t immediately respond to a question about Liveris’s planned role, if any, at DowDuPont.

To satisfy EU conditions, DuPont agreed to sell pesticide properties to FMC Corp. along with some related research-and-development programs. FMC is providing DuPont with $1.2 billion in cash along with some food and pharmaceutical-ingredient businesses.

Dow is now focused on winning clearance from regulators in the U.S., China and Brazil, Chief Financial Officer Howard Ungerleider said by phone Thursday. Additional divestitures of significance probably won’t be required, he said.

“Things are progressing well,” Ungerleider said. “We feel like we are on the timeline to close the transaction in August.”

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