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DowDuPont to Change Breakup Plan

Posted By ASC, Thursday, September 28, 2017
Updated: Thursday, September 28, 2017

Two weeks after its formation, DowDuPont Inc. is altering its plan to splinter into three companies, a step that appears set to end the threat of a fight with as many as four activist investors.

The company, formed by the union of Dow Chemical Co. and DuPont Co. on Aug. 31, has long planned to split into separate companies in the next 18 months: agriculture, specialty-chemical products and materials.

The new plan moves businesses with more than $8 billion in annual revenue from the materials spinoff, which is to house the legacy Dow operations and be named Dow, into the specialty-chemical concern, according to people familiar with the matter.

The move will separate into parts what had been Dow Corning, a pioneer in silicone technology that was taken over by Dow last year, and put some of it into each of the specialty and materials companies, the people said. Previously, the silicone business was to be housed entirely in the new Dow.

The product of a five-month review, it will enable those two companies to focus on different customers, the people said.

Shareholders, including activists Trian Fund Management LP, Third Point LLC, Glenview Capital Management LLC and Jana Partners LLC, had pressed for a dramatic reshaping of the breakup, particularly as it relates to the silicone business.

 

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