Shape of the ‘New Dow’ emerges

Midland, Michigan — Following its planned merger with DuPont, the shape of the New Dow and where the polymers and chemicals business will fit became clearer in a recent regulatory filing with the Securities and Exchange Commission (SEC).

Polyurethanes will stay firmly in the New Dow business in the future, the filing said. New Dow will be the home of existing Dow Chemical, DuPont and Dow Corning’s Materials sciences businesses. In addition to this business, there are plans for a separate Agriculture Co and a separate Specialty Products Co to be launched out of the combined Dow, DuPont, Dow Corning businesses.

The New Dow, is likely to have sales of around $51bn with approximately $46bn coming from Dow business and $5bn from DuPont’s existing performance materials business. That comprises: bio-polymers, elastomers, engineering thermoplastics, ethylene copolymers, filaments, parts & shapes, polymer adhesives and renewable bio-based polymers.

According to the filing, Dow said it will use low-cost ethylene, propylene and slicone to power a series of platforms in material and material science to produce value added materials for the packaging, transportation and infrastructure markets.

In the transportation segment, Dow said the New Dow will combine its thermosets and “broad exterior and ‘in car’ portfolio of products with Dow Corning and DuPont products.

Polyurethanes will be a big part of the infrastructure narrative at the New Dow, the filing implies. Here, the document outlines Dow’s rigid polyurethane for wall, floor, foundation and roof insulation.

These will help the New Dow generate revenues of $60bn, earnings before interest taxation, depreciation and amortisation (EBITDA) of around $15bn, with an ebitda margin of around 20%, the filing said.

You can find more details of the filing on EDGAR, the SEC website here.