DowDuPont shifts pharma business in rejigged post-merger split plan

By Gareth Macdonald contact

- Last updated on GMT

iStock/EtiAmmos
iStock/EtiAmmos

Related tags: Medicine, Management

Dow’s pharma business will be part of DowDupont’s “specialty chemicals” unit under a revised restructuring plan announced this week.

When Dow and Dupont merged on September 1, the combined firm immediately announced its intention to split into three separate divisions focused on agriculture, materials science, and specialty products.

This week DowDupont revised its plan in a move prompted – according to Reuters​ – by investor calls to re-examine "the way proposed new divisions are aligned​."

The firm said “in light of knowledge gained since the announcement of the transaction, certain targeted adjustments will be made between the Materials Science and Specialty Products divisions​.”

New structure

The targeted adjustment includes moving Dow’s Pharma and Food Solutions business from the materials science division to the specialty products division.

In addition, Dow’s industrial biosciences business – which received a Gates Foundation grant to develop low cost production methods for therapeutic proteins last December​ – will also be part of the specialty products division.

Value

Under the new plan the portfolio controlled by the DowDupont’s specialty products is expected to generate revenue of $8bn (€6.7bn) and earnings, before tax, of around $8bn this year.

DowDupont said the new divisions will separate within the next three months “once each division has its own processes, people, assets, systems and licenses in place to operate independently from the parent company​.”

A company spokesman told us "Science, technology, engineering and consumer demands are rapidly changing the face of the industries and markets in which we operate. In order to grow and successfully compete, we must offer customers the choice of new technologies that they need and want, cost effectively — which can only be accomplished by driving more productive, targeted innovation​."

He added: "The cost synergy opportunities are focused on optimizing our global manufacturing footprint, enhancing supply chain and leveraging purchasing spend, and streamline administrative costs. It is too preliminary to comment on broader impact at this time, but we expect to grow the new organization over the longer term."

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