Dow Chemical CEO Plans to Leave Company After Planned Merger
February 02 2016 - 2:25PM
Dow Jones News
By Alison Sider and Lisa Beilfuss
Longtime Dow Chemical Chief Executive Andrew Liveris said he
would leave by mid-2017, after the company completes its planned
merger with rival DuPont Co.
Midland, Mich.-based Dow, a giant in the chemical and
agriculture industries and maker of products ranging from corn
seeds to plastic, in December struck a deal to combine with DuPont
into a $120 billion company that would have about $90 billion in
sales.
The merged company, if the deal is approved, expects to cut some
$3 billion in costs before splitting into three separate businesses
18 to 24 months after the merger closes.
Mr. Liveris, who has served as Dow's chief executive for more
than a decade, said Tuesday that he won't stay on to lead one of
the new businesses. Late last year, Mr. Liveris hinted that the
deal was a culmination of his tenure at the company and that he was
nearing retirement.
In response to activist-investor Dan Loeb and his hedge fund
Third Point LLC, which had called for Mr. Liveris to step down, Dow
said Mr. Liveris "does not contemplate serving" as CEO of the new
material-sciences business that will emerge from the breakup.
Third Point won't be launching a proxy fight for board changes
at Dow this year, which Mr. Loeb privately had threatened in the
past year, said people familiar with the matter.
"We thank Mr. Liveris for his role in effectuating the
Dow/DuPont merger and wish him success in his next chapter," Mr.
Loeb said in a statement. "We look forward to engaging
constructively with the new management teams" at combined
Dow/DuPont's post-breakup companies.
Dow on Tuesday announced the elevation of Vice Chairman and
Chief Operating Officer James Fitterling, who as president and COO
will help shepherd the merger and assist with the transition. Dow
said the companies hope to complete their combination by the end of
this year.
Dow said on Tuesday that profit rose in its latest quarter as a
result of a gain stemming from the sale of a chunk of its chlorine
business.
Revenue, meanwhile, slid 20% due mostly to price declines and
adverse foreign-exchange rates. Results topped expectations and
sent shares up 3.3% in premarket trading.
The company said consumer demand remains strong even amid
worries that global economies are precarious. Sales volume rose 4%
last year, excluding the impact of acquisitions and
divestitures.
"The global economy continues to be volatile with consistent
demand being driven by the consumer, especially in the U.S. and
increasingly from China," Mr. Liveris said. "We believe low energy
prices are a net benefit and will help overcome negative investment
sentiment in other sectors."
In Dow's plastics segment, its largest, cheap raw materials
helped push that business's operating profit to a fourth quarter
record of $1.3 billion.
In the fourth quarter, Dow separately completed its roughly $5
billion divestiture of Dow Chlorine Products.
The sales decline was offset by a large gain on the sale of the
chlorine business in addition to reduced overhead costs and lower
research and development spending.
For the quarter, Dow reported a profit of $3.61 billion, or
$2.94 a share, up from $819 million, or 63 cents, a year earlier.
Per-share results reflect the payout of preferred dividends.
Excluding a gain of $1.96 a share resulting from the
aforementioned divestiture, among other items, per-share earnings
rose to 93 from 85 cents.
Revenue declined 20% to $11.46 billion. Analysts projected 70
cents in adjusted earnings per share on $11.2 billion in revenue,
according to Thomson Reuters.
David Benoit contributed to this article.
Write to Alison Sider at alison.sider@wsj.com and Lisa Beilfuss
at lisa.beilfuss@wsj.com
(END) Dow Jones Newswires
February 02, 2016 14:10 ET (19:10 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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