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DowDuPont to Change Breakup Plan

"Two weeks after its formation, DowDuPont Inc. is altering its plan to splinter into three companies," reports the Wall Street Journal (Sept. 12, Benoit) -- a step that officials hope will end the threat of a battle with as many as four activist investors. Formed by the union of Dow Chemical Co. and DuPont Co. at the end of last month, the company has long planned to split into separate companies within the next year and a half: agriculture, materials, and specialty-chemical products. Journal sources state that this new plan moves businesses with over $8 billion in annual revenue from the materials spinoff, which is to house the legacy Dow operations and be named Dow, into the specialty-chemical concern. According to the newspaper, "the move will separate into parts what had been Dow Corning, a pioneer in silicone technology that was taken over by Dow last year, and put some of it into each of the specialty and materials companies." The silicone business was previously to be housed in the new Dow.

Fox Business (Sept. 12) notes that activist shareholders Trian Fund Management LP, Third Point LLC, Glenview Capital Management LLC, and Jana Partners LLC had pushed hard for a dramatic reshaping of the breakup. At least some of them are expected to be appeased by these changes, sources said. The new Dow will reportedly house products aimed at consumer care, packaging, and infrastructure and have approximately $40 billion in annual revenue. "The specialty-chemical business will focus on electronics and imaging, transportation, construction, and nutrition, with some $20 billion in revenue," adds Fox. The agriculture business will stay the same. The review of the split plan, which was led by McKinsey & Co. consultants, included directors who made site visits to several compan