DuPont, Dow to Keep Headquarters in Place as They Combine, Split -- Update
19 Februar 2016 - 10:31PM
Dow Jones News
By Jacob Bunge
DuPont Co. and Dow Chemical Co. plan to stick by their longtime
hometowns as the chemical giants combine and then split into three
separate companies, resolving some uncertainty that has loomed over
the giant merger for employees and local officials.
Wilmington, Del., DuPont's home since its founding in 1802, will
be the base for two planned companies, one handling agricultural
products and the other electronic components and biosciences.
Midland, Mich., Dow's home since 1897, will retain the
material-sciences company, the companies said on Friday.
The headquarters picks pass over Des Moines and Indianapolis,
where much of DuPont's and Dow's seed and pesticide businesses are
based and where elected officials had pitched to land the
agricultural company headquarters. Both cities will retain "global
business centers" under the companies' merger plan, the companies
said.
Dow and DuPont executives said that keeping corporate bases in
Michigan and Delaware was the most efficient way to run the three
businesses in the future, relying on employees and infrastructure
already there. The deal, which would create a company with a
combined market value of about $104 billion, aims to eliminate $3
billion in combined costs before separating into three publicly
traded companies within three years.
The agricultural company's name will include DuPont, while the
material sciences company's name will include Dow, according to the
companies.
The headquarters decision is a victory for Wilmington, where
DuPont and other big employers have slashed jobs and operations in
recent decades. The merger deal raised concerns that DuPont's
presence would be further reduced in the city of 72,000, and DuPont
in late December announced plans to lay off 1,700 employees in
Delaware as part of a plan to save $700 million before the Dow
combination.
"It's welcome news because we really didn't know what was going
to happen," said Richard Heffron, president of the Delaware State
Chamber of Commerce. "A lot of people were pessimistic." Mr.
Heffron credited efforts by Delaware Gov. Jack Markell and members
of the U.S. Congress for successfully wooing Dow and DuPont.
Keeping the material sciences company in Midland, Mich., which
the companies had signaled earlier, is "good news for us," said
Maureen Donker, mayor of the city of 42,000. "As they go through
this transformation, we'll continue to [work with them] to make
sure we don't miss any opportunities that would arise," she
said.
The governors of Iowa and Indiana said they welcomed the
commitment from Dow and DuPont to keep major agricultural functions
in their states. The Iowa Economic Development Authority on Friday
approved a $2 million loan and $14 million in tax credits on the
condition that the agricultural spinoff keep 500 research and
development jobs in the Des Moines area.
The Indiana Economic Development Corp. is discussing job-related
incentive packages with the companies, but hasn't yet finalized the
terms, a spokeswoman for the group said.
Joshua Jamerson contributed to this article.
Write to Jacob Bunge at jacob.bunge@wsj.com
(END) Dow Jones Newswires
February 19, 2016 16:16 ET (21:16 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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