Third Point, led by activist veteran Daniel Loeb, bought a stake in Dow in 2013 and called on the company to spin off its petrochemicals business — including plastics — in January 2014.
Like DuPont, Dow made some concessions. First, it added new members to its board of directors. Then, in March this year, Dow announced that it would combine a large part of its chlorine value chain with specialty chemicals and ammunition maker Olin Corp. to create a global materials firm with annual sales of almost $7 billion. The combination includes Dow’s global epoxy business and units that make feedstocks used in PVC production.
Still, Dow ceo Andrew Liveris has actively defended his strategy.
Report: Liveris to head merged firm
According to The Wall Street Journal and Bloomberg reports, representatives of DuPont and Dow declined to comment. But the reports have interesting details on what the merged companies would look like and who would be in charge.
According to the WSJ report, after the merger, the company would split up into separate agricultural, materials and material sciences, and specialty products businesses.
According to that report, Liveris has pursued DuPont for more than 10 years, and he contacted Breen about a deal in October.
The WSJ speculated that Liveris would be chairman of the merged company, and Breen would be ceo.
Combining DuPont and Dow would be an interesting merger of different corporate cultures. Both companies have long histories as specialty chemical companies.
Both are major players in commodity resins, to be sure, although DuPont’s plastics portfolio is heavy on engineering materials like nylon and specialty polyesters, while Dow is better known for commodity resins including polyethylene.
Both companies are global giants, but they have roots in small-town America. Dow is the largest employer in Midland, a Midwestern enclave with a population of about 42,000, while DuPont is entrenched in the East Coast city of Wilmington, with a population of about 70,000.
The companies have crossed paths before, notably in 1996, when they combined their specialty rubber businesses into a 50:50 joint venture, DuPont Dow Elastomers. But that venture lasted less than a decade.
At the time of the breakup of the joint venture, Balaji Singh of Chemical Market Resources wrote that: “DuPont Dow as an organization could not survive the general organizational issues that are independent of its overall goals and objectives.”
Singh wrote that the joint venture failed to integrate DuPont and Dow cultures to develop a new start-up with its own identity and culture.
This story first appeared in Plastics News: A Crain publication.