The Dow Chemical/DuPont Merger

By now, those of you who hold Dow Chemical Company common stock in your portfolios have probably received a large document outlining the merger details between Dow Chemical Company and E. I. du Pont de Nemours and Company, two of the largest Chemical, Agricultural, and Specialty Products producers in the world. While reading this document is advised, we are providing a short summary of the merger.

The merger is expected, pending approval of the shareholders and clearance of all regulatory hurdles, to be completed in late 2016. Upon approval, all shareholders of Dow Chemical Company will receive 1 share of DowDuPont for every 1 share of Dow Chemical they own.

After the merger, the new company expects to then spin off three divisions into separate operating companies; Agricultural, Material Science, and Specialty Products. Shareholders who continue to hold their shares in the new company will receive shares of these companies as they are spun off from the parent company.

For more information/commentary, please follow this link.

Eagle Financial Strategies’ Opinion: After reviewing the terms and doing our due diligence on the details of the merger, we are recommending that our investors who currently hold Dow Chemical Company stock continue to do so. After the merger, we will analyze each of the three spin offs to ensure that they are companies that fit in your individual portfolios in accordance with your risk tolerance and objectives.

In addition, we recommend that any one who holds Dow Chemical or DuPont shares in certificate form deposit their certificates in a brokerage account to ease the accounting for the merger and the adjustment to cost basis caused by the future spin offs.

Please contact us with any questions as to the above.

As of this posting, the author is a beneficial holder of shares of Dow Chemical Company.