DuPont and Dow to Merge

DuPont and Dow's official merger will result in a market value of USD 130 billion for the company. The merger is expected to generate approximately USD 3 billion in annual cost synergies and approximately USD 30 billion in market value. Approximately USD 1 billion in growth synergies is expected to be realized.

Following the subsequent separation, three independent publicly listed companies will be established to create leading organizations focused on Agriculture, Materials Science and Specialty Products. Andrew N. Liveris will be Chairman of the Board of Directors of the new company, and Edward D. Breen will be CEO.

ISTANBUL, 16 December 2015 - DuPont (NYSE: DD) and Dow Chemical Company (NYSE: DOW) announced in a statement that, according to a definitive agreement reached by their boards of directors, the companies will merge on a basis where shareholders will retain the same equity ownership they held prior to the merger.

The new company formed from the merger of both companies will be named DowDuPont. The parties subsequently plan to separate DowDuPont on a tax-free basis to create three independent publicly listed companies.

The separation is planned to be completed within 18–24 months following the merger, which is subject to regulatory and institutional approvals and is expected to be completed as quickly as possible.

As a result of the separation of the newly formed company, three new companies will be established: a global leader operating exclusively in agriculture, a global leader operating exclusively in materials science, and a leader operating in technology- and innovation-focused specialty products.

Each company will have a clearly focused field, an appropriate capital structure, and a distinctive and compelling investment thesis and economies of scale. These companies will make particular investments in technological development to deliver excellent solutions to customers and offer them under better terms.

Andrew N. Liveris, Chairman and CEO of Dow, stated regarding the matter: "This formation represents a breakthrough development for our industry and reflects the results of our vision spanning more than a decade to bring together these two powerful companies leading in technological innovation and materials science."

Liveris continued his remarks as follows: "Over the past decade, our entire industry has experienced tectonic shifts in the face of the challenges and opportunities created by the developing world – requiring every company to be forward-thinking and agile, and to focus its operations on specific areas.

This merger is an important development that will accelerate Dow's ongoing transformation and create substantial value and three strong new companies.

The merger of two companies of equal size will create greater value for all our shareholders and customers on one hand, while on the other hand improving the growth profile of both companies."

Edward D. Breen, Chairman and CEO of DuPont, said: "The merger of two complementary global leaders is an extraordinary opportunity for creating long-term and sustainable value and establishing three strong, focused industry-leading companies.

Each company will allocate its capital more efficiently, implement strong innovations more productively, and deliver value-added products and solutions to more customers worldwide," he continued:

"This merger is clearly a major step toward greater growth and value creation for DuPont. The merger of two companies of equal size will result in significant near-term value creation through the additional benefits provided by cost and growth synergies.

Looking further ahead, the triple separation we plan to undertake is expected to provide greater value to our shareholders and customers and create more opportunities for our employees. Each company will operate as a leading organization in the segments demanded by global challenges."

Highly Synergistic Transaction

Upon completion of the merger, the newly formed company named DowDuPont will have a total market value of approximately USD 130 billion at the time of the announcement.

According to the terms of the merger, Dow shareholders will receive 1.00 DowDuPont shares for each Dow share held, and DuPont shareholders will receive 1.282 DowDuPont shares for each DuPont share held.

Excluding preferred shares, Dow shareholders and DuPont shareholders will own approximately 50 percent each of the merged company on a fully diluted share basis.

This transaction is expected to generate approximately USD 3 billion in cost synergies, with 100 percent of the annual run-rate impact of cost synergies to be realized within 24 months following transaction close. Additionally, approximately USD 1 billion in benefits from growth synergies is anticipated.

Three Independent Public Companies Creating Focused Industry Leaders

After the merger, the boards of directors of both companies plan to undertake the necessary work to transform DowDuPont on a tax-free basis into three independent publicly listed companies, with each company targeting investment-grade credit ratings.

Each will be a strong, focused company with strong innovation capacity, global scale, broad product portfolio, capital allocation discipline and distinct competitive positioning.

The three companies the boards intend to create are:

·Agriculture Company

This company will be a leader operating exclusively in agriculture, combining the seed and crop protection operations of DuPont and Dow. The company will have the most comprehensive and diverse product portfolio, reliable production capacity, and excellent growth opportunities in the short, medium and long term.

Through the complementary products of the two companies, growers worldwide will be offered a much broader solution portfolio and choice. The Agriculture Company's pro forma 2014 revenue will be approximately USD 19 billion.

·Materials Science Company

This company will consist of DuPont's Performance Materials segment and Dow's Performance Plastics, Performance Materials and Chemicals, Infrastructure Solutions and Consumer Solutions (excluding Dow Electronic Materials operations) operating segments and will operate exclusively in this area.

The combination of complementary capabilities will result in a company with a broad and comprehensive portfolio of low-cost, innovation-focused, cost-effective products offering packaging, transportation and infrastructure solutions, among many other benefits, to customers operating in high-growth and high-value segments.

·Specialty Products Company:

Envisioned as a technology-focused and innovative leader, this company will focus on operations with similar investment characteristics and oriented toward specialty markets.

The company's scope will include DuPont's Nutrition and Health, Industrial Biosciences, Safety and Protection and Electronics and Communications operations, as well as Dow's Electronic Materials operation.

The complementary products of the two companies will lead to the emergence of a new global leader in Electronic Products, and each company will benefit from the ability to make more targeted investments in its efficient technology development and innovation capabilities.

The Specialty Products Company's pro forma 2014 revenue will be approximately USD 13 billion.

Advisory committees will be established for each of these companies. Breen will lead the Agriculture Committee and the Specialty Products Committee, while Liveris will lead the Materials Science Committee.

These committees will oversee activities conducted in their respective areas and will work with Liveris and Breen during the separation process to ensure the companies operate as independent, standalone entities.

Management, Governance and Corporate Headquarters

Following completion of the merger, Liveris, who currently serves as President, Chairman and CEO of Dow, will serve as Chairman of the Board of the newly formed DowDuPont; Breen, who is Chairman and CEO of DuPont, will continue in his role as CEO of DowDuPont.

A Chief Financial Officer, to be identified later, will report to Breen.

The DowDuPont Board is expected to consist of 16 members, comprising eight current DuPont Board members and eight DowDuPont Board members.

A complete list of members will be announced prior to or upon completion of the merger. Each company's committee will appoint the leaders who will manage the three new independent companies prior to the planned separation.

Upon completion of the merger, DowDuPont will operate from two headquarters (Midland, Michigan and Wilmington, Delaware).

Approvals and Merger Timeline

Subject to regulatory approvals and customary conditions experienced in corporate mergers, including approval by shareholders of Dow and DuPont, the merger is expected to close in the second half of 2016. The subsequent separation the companies plan to undertake is expected to be completed within 18–24 months following close of the merger.

Advisors

Regarding the merger, Dow's financial advisors are Klein & Company, Lazard, and Morgan Stanley & Co. LLC, and legal advisor is Weil, Gotshal & Manges LLP.