Tuesday, February 23, 2016

Spinoffs staying in Delaware after Dow-DuPont merger

The state and New Castle County offered tax relief and pledged $17 million to keep DuPont strong in Delaware, and it paid off on Friday.
The News Journal's reporting team of Jeff Mordock, Scott Goss, Adam Duvernay and Matthew Albright writes:

The state beat out Iowa and Indianapolis to land the corporate headquarters for what will be the largest agriculture company in the nation, a spinoff that will be created after the merger of DuPont and Dow Chemical later this year.
The First State will become home to two of three spinoff companies that will be created from the$130 billion merger.
A yet-unnamed specialty products company, which includes DuPont's nutrition and health unit, will also be headquartered in Delaware. The third spinoff, a material sciences company, will be based in Dow's hometown of Midland, Michigan.
"One of the key things that is nice for us is that we've got this great talent here," DuPont Chief Executive Officer Ed Breen told The News Journal Friday. "We've been pleased with all of the hard work by the people at the corporate headquarters."
Combined, the two spinoffs are expected to generate more revenue than the existing DuPont, according to documents filed with the Securities and Exchange Commission. Agriculture will have about $20 billion in revenue and specialty products is expected to produce $13 billion in revenue. DuPont generated $25 billion in revenue in 2014.
The new agriculture company will surpass St. Louis-based Monsanto Co.
How DE out-hustled other states to win DuPont ag unit
[News-Journal reporters Scott Goss, Matthew Albright, Jeff Mordock and Xerxes Wilson]

After two centuries of shared history between DuPont and Delaware, local officials had just 10 weeks to pull together a deal that would secure the company's future in the state it helped to build.
DE Gov. Jack Markell Photo: Kyle Grantham - The News Journal
That meant putting together an incentive deal with enough tax breaks, subsidies and capital improvement assistance to keep thousands of jobs in New Castle County.
It also required working together to present an unrelenting sales pitch that would beat out much larger states Iowa and Indiana, a feat many analysts and other outsiders considered unlikely, if not downright impossible.
Seventy days later, Delaware emerged victorious with two out of the three businesses that will eventually be spun off from DuPont's impending merger with The Dow Chemical Co.
“It certainly wasn’t out of the question that we could lose all of it,” Gov. Jack Markell said Friday.
“That would have been devastating,” he said. “So we put together a team of collaborators and got to work immediately after DuPont and Dow announced their planned merger in December.”
That effort paid off Friday when the companies announced plans to locate the agriculture company’s corporate headquarters in Delaware.




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