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According to Dealbook [0], "The new company would have dual headquarters in Wilmington, Del., and Midland, Mich." Dual headquarters usually works out about as

According to Dealbook [0], "The new company would have dual headquarters in Wilmington, Del., and Midland, Mich." Dual headquarters usually works out about as well as co-CEOs. To the point of DuPont having a great company culture, I agree. I used to cover them as an investment banker....they are definitely safety-obsessed. [0]: http://www.nytimes.com/2015/12/12/business/dealbook/dow-chemical-and-dupont-merger.html?ref=dealbook&_r=0 http://www.nytimes.com/2015/12/12/business/dealbook/dow-chem...

Nicholas_C 11y ago
What do you do now that you are no longer in banking?
- leroy_masochist 11y ago
  entrepreneur
hitekker 11y ago
I recommend also keeping track of who's in charge to determine what the new company will end up being. Detailed example: https://en.wikipedia.org/wiki/Time_Warner#AOL_Time_Warner_merger https://en.wikipedia.org/wiki/Time_Warner#AOL_Time_Warner_me...
steve-howard 11y ago
Is it unusual to stage a merger like this with the explicit goal of splitting into three smaller companies in the near-ish future? If the company is planning on splitting, I would imagine the consequence of having two headquarters would be different.
- leroy_masochist 11y ago
  The merger and the split are individually quite common, but relatively unusual as a combined transaction. I haven't seen any announced plans to have one HQ focus on one of the three businesses and the other on another, but that would make at least a bit more sense. But then, what about the third business? If I had to guess I'd say the decision to keep both the headquarters is psychology-driven. You don't want either the Dow folks or the DuPont folks thinking that they're the target, because usually in M&A situations the acquiror keeps A LOT more of its corporate overhead. So logically, this perhaps makes the most sense as an attempt to avert the desertion of a lot of talented lawyers, accountants, HR people, and other headquarters types. If that is in fact the case, expect an announcement about six months after the deal closes that they're consolidating their headquarters. My guess is they'd keep it in Delaware.
  - steve-howard 11y ago
    I'm not much of a business guy, I just find this kind of stuff interesting. Thanks for the reply, I know M&As are delicate but I don't know a whole lot of the strategy behind how they're carried out.
  - geogra4 11y ago
    Delaware? Any reason for that specifically?
    - _spoonman 11y ago
      Delaware is very tax-friendly. A vast number of companies incorporate in Delaware due to this reason. edit: words
      - jegutman 11y ago
        It's not really taxes, although the fees for filing corporate documents. The franchise taxes are lower, but the numbers for large companies are so tiny it's inconsequential ($800 in California compared to $150 in Delaware). My understanding is that Delaware has strong corporate law with well defined protections for corporations and lots of case law to back it up from their Chancery Court. The huge history of case law is really what makes the big deal from what I've read because it makes contracts enforced there (which all shareholder contracts would be) much more predictable in terms of what's allowed.
        omginternets 11y ago
        My startup is based in Delaware: you're spot on. Low taxes, few constraints for internal organization, and clear answers from lawyers stemming from a rich jurisprudential history.
      - leroy_masochist 11y ago
        All true, but additionally in this case, the actual physical headquarters of DuPont is in Wilmington, Delaware.
- akg_67 11y ago
  There were only couple of options for this merger to take place. 1. Dow and DuPont merge without any further plans to split. This wouldn't fly with regulators as combined entity will have too much power in US as well as worldwide. Not only US regulators but also regulators in EU and Asia will be very interested in vetting such deal. 2. Dow and DuPont swap the agriculture and specialty products divisions and merge the materials division with recent DuPont spin-off Chemours. This wouldn't fly with regulators either as both Dow and DuPont will have too much power in their respective segments. If Dow and DuPont would have gone with option 1, the regulators would have come up with their own plan to divest certain businesses to approve merger. Instead, Dow and DuPont are offering a future split solution by proposing to split in three portions that will get them closer to option 2 with some regulator-driven divestment. I will not be surprised when and if merger and split goes through, we land up with the second scenario anyway. Agriculture goes to Dow with HQ in Midland MI, Specialty products goes to DuPont with HQ in Wilmington DE, and Materials goes to Chemours.

Nicholas_C 11y ago

What do you do now that you are no longer in banking?

leroy_masochist 11y ago
entrepreneur

hitekker 11y ago

I recommend also keeping track of who's in charge to determine what the new company will end up being. Detailed example: https://en.wikipedia.org/wiki/Time_Warner#AOL_Time_Warner_merger https://en.wikipedia.org/wiki/Time_Warner#AOL_Time_Warner_me...

steve-howard 11y ago

Is it unusual to stage a merger like this with the explicit goal of splitting into three smaller companies in the near-ish future? If the company is planning on splitting, I would imagine the consequence of having two headquarters would be different.

leroy_masochist 11y ago
The merger and the split are individually quite common, but relatively unusual as a combined transaction. I haven't seen any announced plans to have one HQ focus on one of the three businesses and the other on another, but that would make at least a bit more sense. But then, what about the third business? If I had to guess I'd say the decision to keep both the headquarters is psychology-driven. You don't want either the Dow folks or the DuPont folks thinking that they're the target, because usually in M&A situations the acquiror keeps A LOT more of its corporate overhead. So logically, this perhaps makes the most sense as an attempt to avert the desertion of a lot of talented lawyers, accountants, HR people, and other headquarters types. If that is in fact the case, expect an announcement about six months after the deal closes that they're consolidating their headquarters. My guess is they'd keep it in Delaware.
- steve-howard 11y ago
  I'm not much of a business guy, I just find this kind of stuff interesting. Thanks for the reply, I know M&As are delicate but I don't know a whole lot of the strategy behind how they're carried out.
- geogra4 11y ago
  Delaware? Any reason for that specifically?
  - _spoonman 11y ago
    Delaware is very tax-friendly. A vast number of companies incorporate in Delaware due to this reason. edit: words
    - jegutman 11y ago
      It's not really taxes, although the fees for filing corporate documents. The franchise taxes are lower, but the numbers for large companies are so tiny it's inconsequential ($800 in California compared to $150 in Delaware). My understanding is that Delaware has strong corporate law with well defined protections for corporations and lots of case law to back it up from their Chancery Court. The huge history of case law is really what makes the big deal from what I've read because it makes contracts enforced there (which all shareholder contracts would be) much more predictable in terms of what's allowed.
      - omginternets 11y ago
        My startup is based in Delaware: you're spot on. Low taxes, few constraints for internal organization, and clear answers from lawyers stemming from a rich jurisprudential history.
    - leroy_masochist 11y ago
      All true, but additionally in this case, the actual physical headquarters of DuPont is in Wilmington, Delaware.
akg_67 11y ago
There were only couple of options for this merger to take place. 1. Dow and DuPont merge without any further plans to split. This wouldn't fly with regulators as combined entity will have too much power in US as well as worldwide. Not only US regulators but also regulators in EU and Asia will be very interested in vetting such deal. 2. Dow and DuPont swap the agriculture and specialty products divisions and merge the materials division with recent DuPont spin-off Chemours. This wouldn't fly with regulators either as both Dow and DuPont will have too much power in their respective segments. If Dow and DuPont would have gone with option 1, the regulators would have come up with their own plan to divest certain businesses to approve merger. Instead, Dow and DuPont are offering a future split solution by proposing to split in three portions that will get them closer to option 2 with some regulator-driven divestment. I will not be surprised when and if merger and split goes through, we land up with the second scenario anyway. Agriculture goes to Dow with HQ in Midland MI, Specialty products goes to DuPont with HQ in Wilmington DE, and Materials goes to Chemours.