DowDuPont (Midland, MI, and Wilmington, DE) announced yesterday that it will make “targeted adjustments” between its Materials Science and Specialty Products divisions to “better align these businesses with the end markets they serve.” Following the formal launch of the company last month, the changes were unanimously approved by the board of directors after a thorough review by the board, management, independent advisors including McKinsey & Co. and various stakeholders, said the company in a press release.
DowDuPont said that it will move the following businesses from the Materials Science division to the Specialty Products division:
- Dow's Automotive Systems' adhesives and fluids platforms;
- Dow's Building Solutions business;
- Dow's Water and Process Solutions business;
- Dow's Pharma and Food Solutions business;
- Dow's Microbial Control business;
- DuPont's Performance Polymers business; and
- several silicones-based businesses aligned with applications in industrial LED, semiconductors, medical, as well as the Molykote brand lubricants for automotive and industrial equipment and Multibase Inc., which provides solutions for the thermoplastic compounding industry.
The realigned businesses account for total net sales of more than $8 billion on a forecasted 2017 basis, according to DowDuPont.
“These adjustments are . . . fully supported by the Materials Science Advisory Committee, as they better align select businesses with the market verticals they serve, while maintaining integration and innovation strengths within strategic value chains,” commented Andrew Liveris, Executive Chairman of DowDuPont, in a prepared statement. “As a result, both our Materials Science and Specialty Products divisions will be well-positioned to better anticipate and meet customer needs through focused innovation and technology development that will deliver accelerated growth from a broader suite of best-in-class products."
In the announcement, DowDuPont also described its three intended companies built around agricultural products, materials science and specialty products.
The Materials Science Co. will have “the vast majority of its sales aligned with three narrower and deeper, high-growth market verticals: packaging, infrastructure and consumer care,” according to the press release. It will consist of three segments: Performance Materials & Coatings, Industrial Intermediates & Infrastructure and Packaging & Specialty Plastics. The company will maintain the Dow brand and be headquartered in Midland.
The Specialty Products Co. will “apply its market knowledge and deep expertise in science and application development to solve customer needs in distinct markets, including electronics, transportation, building and construction, health and wellness, food and safety,” said DowDuPont. Transportation & Advanced Polymers, one of the four segments under that company umbrella, will provide “high-performance engineering resins, adhesives, lubricants and parts to engineers and designers in the transportation, electronics and medical markets to enable integrated materials solutions for demanding applications and environments,” according to the company.
The Dow and DuPont “ merger of equals ” was first announced in 2015. In the press release issued yesterday, the company reiterated its previously announced plans to achieve run-rate cost synergies of approximately $3 billion and approximately $1 billion in growth synergies. The two companies had combined sales of $72 billion in 2016.