`

2015 TOP STORIES: Merger casts uncertainty over Dow Agro

December 26, 2015

The future of the Dow AgroSciences LLC headquarters became murky this year after the ag tech firm’s parent company, Michigan-based Dow Chemical Co., agreed to merge with DuPont Co. The two companies plan to integrate their agricultural units and spin them off as an independent, publicly traded company by 2018.

Ed Breen, CEO of Delaware-based DuPont, will lead that process. And Dow Chemical CEO Andrew Liveris said the combined ag company will be “the future DuPont.” DuPont’s ag business, much of which operates under the Pioneer brand, is larger than Dow Agro and has $11 billion in sales per year, while Dow Agro has $7 billion. DuPont’s ag business employs more than 12,000 workers, while Dow’s employs about 9,000

Dow and DuPont plan $1.3 billion in expense reductions in the ag business units as a result of the merger. But Breen said cost-cutting plans would spare the most basic R&D as well as sales teams. Those are the two units that account for most of the 1,500 workers at Dow Agro’s Indianapolis complex on Zionsville Road.

“I always am very careful not to over-affect the person that is selling the product to the customer and the people inventing and making the product. And everything else in the middle is a little more fair game,” Breen said. He said DuPont’s strengths in seeds and plant tissues, combined with Dow Agro’s strengths in genetically modified seed traits and crop-protection products, should help the merged companies steal business from competitors.

The industry is suffering declining demand in Latin America and a stronger dollar. Merger talks gripped the industry starting in May, when Monsanto Co. tried, unsuccessfully, to acquire Syngenta AG.

—J.K. Wall

ADVERTISEMENT
Comments powered by Disqus