The Dow Chemical — DOW Chemical — Merger or Acquisition (March 2016)
27 slides from The Dow Chemical's merger presentation, Mar 2, 2016
Slide 1: Merger Update & Form S-4 Highlights
MERGER UPDATE & FORM S-4 HIGHLIGHTS March 1, 2016 Filed by The Dow Chemical Company Pursuant to Rule 425 under the Securities Act of 1933, as amended, and deemed filed pursuant to Rule 14a-12 under the Securities Exchange Act of 1934, as amended Subject Company: The Dow Chemical Company; E. I. du Po
Slide 2: Regulation G and Cautionary Notes on Forward Looking Statements
Regulation G The attached charts include information that does not conform to generally accepted accounting principles (GAAP). Management of the companies believe that an analysis of this data is meaningful to investors because it provides insight with respect to comparisons of the ongoing operating
Slide 3: Important Information About the Transaction and Where to Find It
Important Information About the Transaction and Where to Find It In connection with the proposed transaction, on March 1, 2016 DowDuPont Inc. (f/k/a Diamond-Orion HoldCo, Inc.) (“DowDuPont”), filed with the Securities and Exchange Commission (“SEC”) a preliminary registration statement on Form S-4 t
Slide 4: Agenda
Agenda Form S-4 Financial Highlights Form S-4 DowDuPont Governance Highlights Timeline & Key Workstreams Update DowDuPont Synergies DowDuPont: Unlocking Shareholder Value & Creating Three Leading Businesses Underpinned by Strong Industrial Logic
Slide 5: Form S-4 Overview
Form S-4 Overview Initial filing of Form S-4 Registration Statement with the Securities and Exchange Commission (SEC) Initial filing starts the comment and review period with the SEC Form S-4 will become effective after the SEC has completed their review
Slide 6: Form S-4 Financial Highlights
Form S-4 Financial Highlights Combined 2015 pro forma Net Sales of ~$74B and Operating EBITDA of ~$15B Pro forma unaudited financial information was prepared on an as-reported basis1 Income statement and balance sheet reclassifications reflect changes to adjust DuPont’s financial statement presentat
Slide 7: DowDuPont Financial Profile
DowDuPont Financial Profile Net Sales ~$49B ~$25B ~$74B Operating EBITDA ~$10B ~$5B ~$15B Operating EBITDA margin % ~20% ~20% ~20% Dividend Policy 45% of Net Income 25-45% of Cash from Operations Consistent with Current Policies at Both Companies Credit Rating2 BBB/Baa2/BBB A-/A3/A Targeting an Inve
Slide 8: Agenda
Agenda Form S-4 Financial Highlights Form S-4 DowDuPont Governance Highlights Timeline & Key Workstreams Update DowDuPont Synergies DowDuPont: Unlocking Shareholder Value & Creating Three Leading Businesses Underpinned by Strong Industrial Logic
Slide 9: Governance Highlights
Andrew N. Liveris to be named Executive Chairman with focus on Material Science Edward D. Breen to be named CEO with focus on Agriculture and Specialty Products Breen and CFO are collectively responsible for DowDuPont’s financial oversight Combined Board of Directors to have 16 directors, consisting
Slide 10: Advisory Committees: Structure & Responsibilities
Advisory Committees: Structure & Responsibilities Advisory Committee responsibilities: Sole authority to approve any changes to the scope of its associated business by an affirmative vote of the majority of the members of such committee; Develop capital structure in accordance with the DowDuPont byl
Slide 11: Agenda
Agenda Form S-4 Financial Highlights Form S-4 DowDuPont Governance Highlights Timeline & Key Workstreams Update DowDuPont Synergies DowDuPont: Unlocking Shareholder Value & Creating Three Leading Businesses Underpinned by Strong Industrial Logic
Slide 12: Timeline of Planned Merger of Equals
Close 2H16 Signed 12/11/15 Share-holder Vote 2Q16 S-4 Filing 1Q16 Initial Draft 3/1/16 Hart-Scott- Rodino Filing 1/27/16 ROW Competi-tion Filings 1Q16/ 2Q16 In-Process Complete Spins1 Stand Up SpinCos1 Capture >$3B of cost synergies Significant Progress on Execution of Planned Merger of Equals Drive
Slide 13: Joint Implementation Planning
Joint Implementation Planning Joint Executive Steering Team Prepare “execution-ready” plans to achieve $3B cost synergies ASAP Define operating model, org. structure and linkages to “corporate” Financial and legal structure Jim Fitterling Nick Fanandakis TRACK 2 Capture Synergies Regulatory Clearanc
Slide 14: Agenda
Agenda Form S-4 Financial Highlights Form S-4 DowDuPont Governance Highlights Timeline & Key Workstreams Update DowDuPont Synergies DowDuPont: Unlocking Shareholder Value & Creating Three Leading Businesses Underpinned by Strong Industrial Logic
Slide 15: Total Expected Cost Synergies of ~$3 Billion
Total Expected Cost Synergies of ~$3 Billion Note: Numbers may not sum due to rounding. 1. One-time integration costs. Total Cost Synergies ~$3B Total Growth Synergies ~$1B Total Synergies ~$4B Costs to Achieve1 $3.5B - $4.1B 100% of Run-Rate Cost Synergies Achieved within the First 24 Months from T
Slide 16: Agriculture Company Overview
Agriculture Company Overview ~$10B ~$6B Note: Numbers may not sum due to rounding. 1. Based on Dow‘s and DuPont’s Net Sales as reported in each company’s 2015 Form 10-K filing. INDUSTRY LEADERS FOCUSED ON CORE COMPETENCIES Agriculture Net Sales: ~$16B1 Agricultural Sciences Agriculture Headquarters:
Slide 17: Specialty Products Company Overview
Specialty Products Company Overview Headquarters: Wilmington, Delaware Credit Profile: Investment Grade Cost Synergies: Integrate Dow Electronic Materials and DuPont Electronics & Communications laboratory facilities and technology presence Consolidate each parties’ Electronics organization into one
Slide 18: Material Science Company Overview
Material Science Company Overview ~$5B ~$40B Low-cost integration & innovation combined with expanded customer offerings in key growth sectors One of the world’s largest packaging materials suppliers A leader in thermoplastics, elastomers, finished parts and biopolymers Greatest breadth of acrylic c
Slide 19: Estimated Corporate & Leveraged Services Synergies
Estimated Corporate & Leveraged Services Synergies Cost Synergies by Function ~$3B Streamline costs by achieving top quartile cost position for common corporate functions and driving substantial scale benefit by leveraging across businesses Developing integration plans for our transactional processe
Slide 20: Agenda
Agenda Form S-4 Financial Highlights Form S-4 DowDuPont Governance Highlights Timeline & Key Workstreams Update DowDuPont Synergies DowDuPont: Unlocking Shareholder Value & Creating Three Leading Businesses Underpinned by Strong Industrial Logic
Slide 21: A Combination Unlocking Exceptional Value Across Three Leading Businesses
A Combination Unlocking Exceptional Value Across Three Leading Businesses Highly-synergistic merger of equals projected2 to unlock ~$30 billion of market value Intent to pursue tax-free3 separation into three independent companies: Leading Global Pure-play Agriculture Business Leading Global Pure-pl
Slide 22: Ag Co: World-Leading, Comprehensive Agriculture Business
Ag Co: World-Leading, Comprehensive Agriculture Business Most Comprehensive and Diverse Seed and Crop Protection Portfolio World’s leading production agriculture business with most comprehensive, balanced and diverse seed and crop protection portfolio with exceptional opportunity for growth Rich his
Slide 23: Electronics / Specialty Products
Electronics Unique businesses that share similar investment characteristics and focus on specialty products Core strengths in product innovation and application development: Clear capital allocation focus and strong product pipelines Strong portfolio of differentiated offerings: Highly technical, kn
Slide 24: Materials Co: Low-Cost Integration & Value-Added Innovation
Materials Co: Low-Cost Integration & Value-Added Innovation Underpinned by Operational and Commercial Excellence Ethylene Propylene High-Throughput Research Polymer Science Material Science Formulation Sciences Process Engineering NARROWER, DEEPER END MARKET PRESENCE ADVANTAGED BACK-INTEGRATION WORL
Slide 25: Appendix
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Slide 26: DuPont Non-GAAP Reconciliations
DuPont Non-GAAP Reconciliations RECONCILIATIONS OF OPERATING EBITDA TO CONSOLIDATED INCOME STATEMENTS (dollars in millions) 2015 Income from continuing operations before income taxes $2,591 Add: Significant items (benefit) charge before income taxes(1) 453 Add: Non-operating pension/OPEB costs 397 O
Slide 27: Dow Non-GAAP Reconciliations
Dow Non-GAAP Reconciliations EBITDA Reconciliation 2015 Net Income Attributable to The Dow Chemical Company $ 7,685 + Net Income Attributable to Noncontrolling Interests 98 + Provision for Income Taxes 2,147 Income Before Income Taxes $ 9,930 + Depreciation and Amortization 2,521 - Interest Income 7