E. I. du Pont de Nemours and Company (DuPont)NYSE
Tue, Oct. 25, 10:45 AM
- Dow Chemical (DOW -0.2%) CEO Andrew Liveris says the merger with DuPont (DD -0.6%) may be delayed until February from a planned closing late this year.
- Agriculture is the greatest concern of European regulators, Liveris tells Bloomberg: “One of the strongest lobbies in the world out there is the farm lobby, and in Europe, the agricultural sector is very, very critical to them, somewhat protected."
- The European Commission recently delayed its decision deadline until Feb. 6 as it sought additional information about the merger, but Liveris says the value created by the deal is "worth a few months of delay."
- The CEO does not say whether the companies planned to sell assets to help win approval, although reports have indicated that Dow is seeking a buyer for its copolymers business and DuPont is planning to sell a herbicides business to ease regulators’ concerns.
- In its Q3 earnings report, DuPont CEO Ed Breen said he expects the merger to close sometime during Q1 2017.
Wed, Oct. 19, 1:56 PM
- DuPont (DD +0.4%) is initiated with a Buy rating and $78 price target at Nomura, which expects strong earnings potential from the proposed combination with Dow Chemical (DOW +0.6%).
- Nomura expects the DuPont-Dow merger to generate above-trend growth in earnings and free cash flow for the next three years, which it considers "exceptional in a macro environment where growth is scarce."
- DuPont management’s integration plan through 2019, which centers on aggressive cost cuts and assets spinoffs and sales, makes the shares especially compelling, the firm says, estimating the moves should result in equity value compounding at 16% annually during 2017-19.
Mon, Oct. 10, 2:31 PM
- Dow Chemical (DOW +0.8%) is upgraded to Buy from Neutral with a $62 price target, raised from $53, at UBS, which believes the merger with DuPont (DD +0.6%) could gain regulatory approval and that the stock is now too cheap to ignore.
- The firm already factors in $3B in potential cost savings from the deal but now substantially raises its free cash flow estimates in the materials to reflect ~20% decline in capex from pro forma 2016-18.
- UBS also revisits its sum-of-the-parts estimate based on the valuation of each spinoff company likely to come out of the combined new company to reflect a more comprehensive peer set, which it uses to benchmark vs. the S&P 500.
Mon, Oct. 3, 2:18 PM
- Dow Chemical (DOW +1.6%) and DuPont (DD +1.8%) are both upgraded to Buy from Neutral at Citigroup, which calls the combined company "the stock to own in 2017" if their merger deal is completed.
- Citi cites the companies' "massive" cost-cutting opportunity after the merger goes through as well as the potential for upside to the stated $3B synergy target; from the split-up lean and agile companies, the firm expects an incremental $1B synergy above the companies' target, adding $0.30/share to proforma combined earnings.
- The firm raises its price target on Dow to $59 from $55 and on DD to $76 from $72.
Mon, Oct. 3, 8:14 AM
- The European Commission have resumed their investigation into the $130B merger of Dow Chemical (NYSE:DOW) and DuPont (NYSE:DD) after the companies provided key data, and will decide by Feb. 6 whether to approve the deal, Reuters reports.
- The EU antitrust regulator opened a full investigation into the case in August, concerned that the deal could reduce competition in crop protection, seeds and certain petrochemicals.
Wed, Sep. 21, 2:54 PM
- German lawmakers lashed out in skepticism today at Bayer's (OTCPK:BAYRY -0.9%) planned takeover of Monsanto (MON +1.1%) in a meeting of parliament that highlighted the backlash Bayer faces in its home market against buying a company that many Germans see as a champion of genetically modified crops.
- Eight of the 12 lawmakers who spoke, including three members from within Chancellor Merkel’s coalition, criticized the deal; the lawmakers have no legislative authority to stop the deal, but some are calling on regulators to do so.
- The deal also drew scrutiny at the U.S. Senate Judiciary Committee yesterday, where Sen. Grassley said the deal was part of a "tsunami of consolidation" that could reduce choice and raise the price of chemicals and seed for farmers, which ultimately would affect choice and costs for consumers.
- Company execs - including some from DuPont (DD +0.4%), Dow Chemical (DOW -0.1%) and Syngenta (SYT +0.2%) - sought to allay concerns and reassure lawmakers that they would keep licensing new types of seeds to smaller companies.
Fri, Sep. 9, 7:36 AM
- The European Commission has halted its scrutiny of Dow Chemical (NYSE:DOW) and DuPont's (NYSE:DD) proposed merger while the companies provide more information regarding their $130B deal.
- Once the data is received, the antitrust enforcer will set a new deadline for its investigation.
- The two companies, which aim to close the deal in early 2017, had previously offered concessions which regulators said were insufficient.
Tue, Aug. 23, 5:56 PM
- The U.S. Senate Judiciary Committee announces plans to hold a hearing in late September to discuss the mergers of Dow Chemical (NYSE:DOW) and DuPont (NYSE:DD) as well as ChemChina's purchase of Syngenta (NYSE:SYT).
- Committee chair Sen. Grassley of Iowa has expressed concern that the deals would result in farmers paying more for seeds, pesticides and herbicides and reduce the companies' incentives to innovate.
- The committee has no formal say over whether the deals may go forward; the Justice Department is reviewing the Dow-DuPont merger, while the FTC is looking at ChemChina's purchase of Syngenta.
Thu, Aug. 11, 10:32 AM
- European antitrust regulators open an in-depth investigation into the proposed merger of Dow Chemical (DOW -0.2%) and DuPont (DD +0.1%), saying the deal may reduce competition in crop protection, seeds and some petrochemicals, as well as stifle innovation.
- Commitments submitted by the companies last month to address some of the EU regulator’s concerns were “insufficient to clearly dismiss its serious doubts as to the transaction’s compatibility” with EU merger rules, the European Commission says.
- In a joint statement, Dow and DuPont say they expected a thorough review and are working with relevant regulators, while continuing to believe that the merger is good for customers and consumers.
Wed, Jul. 20, 11:28 AM
- DuPont (DD +0.6%) and Dow Chemical (DOW +0.9%) shareholders approve the merger of the two largest U.S. chemical companies at their respective special meetings, a key step in closing the deal before year-end.
- The next hurdle is winning antitrust clearance: The U.S. Department of Justice in February issued a second request for information on the merger, the companies notified China’s competition agency of the deal in May, and they filed with the European Commission last month.
- Within two years, the companies plan to split into three separate publicly traded companies focused on agriculture, material science and specialty products.
Tue, Jun. 28, 3:39 PM
- Dow Chemical (DOW -2.1%) and DuPont (DD -2.6%) are downgraded to Neutral from Overweight at J.P. Morgan, citing a lack of near term upside potential amid rising risks of contraction in the world's major economic regions, particularly Europe.
- "When recessions arise, oil demand contracts and oil prices decreases; plastics product prices and profit margins then move lower," writes JPM's Jeffrey Zekauskas, adding that under weakening economic conditions, the market likely will ask for a higher risk premium or margin of safety in investing in Dow.
- JPM sees a greater likelihood that Dow and DuPont can be purchased over the next year at comparable or lower share prices.
- The firm cuts its price target for Dow to $50 from $57 and lowers its price outlook for DD to $64 from $73.
Tue, Jun. 14, 3:59 PM
- The U.S. Department of Justice's antitrust division should carefully analyze Dow Chemical's (DOW -1%) proposed $130B merger with DuPont (DD -1.3%) to ensure it will not hurt competition in the farming sector, U.S. Sen. Grassley says.
- The veteran senator says in a letter to the DoJ that he was concerned the planned merger would "decrease competition in an agriculture sector that has already been subject to a number of waves of consolidation in recent years."
- Grassley, who chairs the Senate's judiciary committee and serves on the agriculture committee, in March asked for an assessment of the impact on domestic food security from ChemChina's planned takeover of Syngenta.
Thu, May 19, 11:48 AM
- A Monsanto (MON +4.9%) takeover by Bayer is considered "relatively unlikely" by Jefferies analyst Laurence Alexander, as he expects MON to object to the offer given its conviction in its R&D pipeline and longer-term competitive advantages.
- Alexander thinks shares of Syngenta (SYT -0.5%) and DuPont (DD -0.7%) could be pressured as regulatory scrutiny likely would intensify if MON gets acquired, and BASF (OTCQX:BASFY -1.4%) could fall on investor concerns of a potential counter-bid.
- But the analyst sees a potential MON takeover as positive for shares of Novozymes (OTCPK:NVZMY -0.1%) and FMC Corp. (FMC -0.7%), as "a further roll-up of 'specialty generic' agrichemical assets could entice capital, and FMC would be a plausible anchor for such an attempt."
- Jefferies rates MON as a Hold with a $95 price target.
- Now read Bayer investor "deeply concerned" about move for Monsanto
Thu, May 12, 3:37 PM
- Monsanto (MON +8.5%) remains sharply higher though off highs of the day, following headlines that Bayer (OTCPK:BAYRY -4.1%) and BASF (OTCQX:BASFY -1.7%) are considering a possible acquisition of the company.
- Financial Times reports that MON is interested in forming some sort of combination with the agrochemical businesses of either of the two companies but opposes any deal that would turn it into a division of a German company.
- Piper Jaffray analysts say the interest in acquiring MON is mere speculation, seeing a potential joint venture as a more likely outcome as "we believe Monsanto remains committed to building a chemistry business."
- J.P. Morgan believes Bayer would need to raise equity given the size of the deal, and thinks Bayer investors likely would be only lukewarm around the potential deal given limited accretion and investor desire for Bayer to strength its pharma pipeline following recent setbacks.
- Analysts say a MON takeover likely would draw intense scrutiny from global regulators already confronting an unprecedented wave of consolidation in the crop chemicals industry involving the likes of Dow Chemical (DOW +0.8%), DuPont (DD +0.2%) and Syngenta (SYT +0.4%).
- Now read Seed war sparked: Bayer and BASF to battle over Monsanto?
Tue, Apr. 26, 10:55 AM
- DuPont (DD +2.4%) says it expects the SEC's review of its proposed merger with Dow Chemical (DOW +2.2%) to be completed by the end of June, with the deal closing in October or November.
- "We're in great shape in all our filings in all the jurisdictions around the world - China, Europe, Brazil, obviously the U.S.," CEO Edward Breen said in today's earnings conference call; he did not say when he thought the Justice Department might finish its antitrust review.
- DuPont also says it plans to buy back $2B of shares in 2016, and make the repurchases after the shareholder vote for the deal, expected to be held after completion of the SEC review.
- Breen says DuPont's overhead is down to 1.3% of sales, closing in on his target of 1%, and that the company is on track with plans to eliminate $730M in annual costs this year, with Q1 corporate expenses down 44% from prior-year levels, and overall operating costs falling 7%.
- DuPont is higher after reporting better than expected Q1 earnings and raising its 2016 earnings outlook, citing a weakening of the dollar against most currencies.
- Now read Golden parachutes descend onto Dow, DuPont CEOs
Mon, Mar. 7, 6:21 PM
- DuPont (NYSE:DD) rose 2.4% in today's trade following reports that BASF (OTCQX:BASFY) is considering a bid for the company, even as DuPont prepares to merge with Dow Chemical (NYSE:DOW).
- "We just don't see it... BASF cannot come up with a more attractive offer" than the current Dow-DuPont deal, Bernstein analysts write, adding that BASF would struggle to raise the expected $72B for a takeover.
- Jefferies' Laurence Alexander notes that BASF has not done large-scale M&A since the end of the last decade, and its reported interest in a potential spoiler bid for DuPont "run aground" on BASF’s return on investment capital, disinterest in equity financing, and credit ratings.
- "The math is terrible for this," Bernstein's Jonas Oxgaard says, also noting that DuPont may be obligated to pay Dow a $1.9B termination fee if it breaks the deal.
- For his part, CNBC's Jim Cramer thinks a DuPont-BASF deal makes no sense "strategically or financially" for either company, although BASF could emerge as a buyer of certain assets Dow-DuPont may be required to divest in order to secure antitrust approval for their merger.