What DuPont’s merger with Dow could mean for Delaware

Hey, Delaware, it’s a fine morning for a big headline: #DowDuPont is trending.
Heads are spinning about what the mega-merger between Dow Chemical and DuPont means for the First State, but first, the facts:

• The new company’s name is DowDuPont.
• The merger will cost about $3 billion, but is projected to create about $30 billion of market value.
• Australia native Andrew Liveris is repping the Dow side as the new company’s executive chairman, while DuPont CEO Edward Breen will be the CEO of the combined company.
• As soon as possible (in the next 18-24 months) Liveris and Breen will break up the massive company into three independent, publicly-traded companies.
• The three companies? Agriculture (seed and crop protection), material science (including DuPont’s Performance Materials segment) and specialty products (including DuPont’s Nutrition & Health, Industrial Biosciences, Safety & Protection and Electronics & Communications businesses).
• Breen will lead the committees for the agriculture and specialty products companies while Liveris will lead the material science committee.
• The dual HQ for DowDuPont is in Wilmington and Midland, Mich.

Here’s a statement from DuPont guy (now DowDupont guy) Breen:

For DuPont, this is a definitive leap forward on our path to higher growth and higher value. This merger of equals will create significant near-term value through substantial cost synergies and additional upside from growth synergies. Longer term, the three-way split we intend to pursue is expected to unlock even greater value for shareholders and customers and more opportunity for employees as each business will be a leader in attractive segments where global challenges are driving demand for these businesses’ distinctive offerings.

So what does that all mean for Delaware?
At this point, it’s a little early to say, but plenty are speculating.

WF Analyst to Dow and DuPont: I was going to say congrats on the deal of the century, but in this case, congrats on the deal of 3 centuries

— Leslie Picker (@LesliePicker) December 11, 2015

Gov. Jack Markell released a statement this morning, saying he’s already had talks with Breen about the merger and that he will advocate for the employment of Delaware’s scientists, engineers and business leaders in the upcoming three companies.
Alas, “synergies” loom.
“None of this, of course, is of any solace for the workers and families who will be affected by this transition,” Markell said in the statement. “The state is committed to supporting those affected by DuPont’s cost cutting in Delaware.”
Roger Dennis, dean of Drexel University’s Thomas R. Kline School of Law, told the News Journal he doesn’t expect any of the three companies to stay in Delaware.
Peter Carstensen, a professor of antitrust law at the University of Wisconsin, agreed.
“Delaware will be lucky if one of those three parts are still in the state if this merger flies,” Carstensen told the paper. He added that the material science company is the most likely branch to hang on in Delaware, if at all (the committee will be headed by Liveris), because DuPont has the employees and facilities at its Chestnut Run office complex to do the job.

#DowDuPont reax @GovernorMarkell: "We will continue to advocate that Delaware's many advantages can be of major benefit to the new companies

— Mark Eichmann (@MarkEichmann) December 11, 2015

The New York Times reports that job reductions are to be expected from the “merger of equals,” which still has to overcome antitrust scrutiny from federal regulators:

Dow employs 53,000, while DuPont had 63,000 employees as of the end of 2014. The companies did not mention layoffs in their announcement, but DuPont, in a separate statement, said it expected to record a charge before taxes of $780 million, consisting of roughly $650 million in employee separation costs. DuPont said 10 percent of its global work force would be affected.