Dow unveils new job cuts, planned CEO retirement as DuPont merger nears
2/2/2016 12:00:00 AM
By Amrutha Gayathri and Swetha Gopinath
Reuters
Dow Chemical CEO Andrew Liveris said he would retire by mid-2017, following the merger of the company with fellow chemical and seeds producer DuPont.
Reuters
Dow Chemical CEO Andrew Liveris said he would retire by mid-2017, following the merger of the company with fellow chemical and seeds producer DuPont.
DuPont CEO Edward Breen is set to head the combined company after the merger, while Liveris will be the executive chairman after the deal closes in the second half of 2016.
"... My own planned transition out of the company, which will occur when we are set up to be spun off, but no later than the end of Q2 2017," Liveris said on a post-earnings call.
DuPont and Dow Chemical agreed to merge in an all-stock deal in December in a first step towards breaking up into three separate businesses, focused on material sciences, specialty products and agriculture.
Activist investor Daniel Loeb of hedge fund Third Point has been calling for the removal of Liveris from the merged company.
Loeb, who had previously called for a break-up of Dow, sent a private letter to the company's board in December, raising questions about the timing of the DuPont deal, according to the Wall Street Journal.
Dow also named James Fitterling president on Tuesday. Fitterling, who will continue as COO, will report to Liveris.
Shares of the company, which reported a better-than-expected quarterly profit on higher margins, rose as much as 4% to $44.46 in morning trading.
Dow is targeting an additional $300 million from cost savings in 2016, building on the $345 million it realized last year, chief financial Ofoicer Howard Ungerleider said on the call.
DuPont said last Tuesday it would cut $730 million in costs in 2016, with annual savings adding up to $1 billion.
Dow will cut 500 more jobs, taking its total workforce reduction to 2,200, Liveris said, adding that the company has laid off 1,200 employees so far. Dow employed 49,500 people worldwide in 2015.
DuPont, similarly, plans to cut 10% of its workforce of about 54,000 employees.
Cost cuts boosted Dow's operating margin by 406 basis points to 20.9% in the three months ended Dec. 31. Cost of sales fell 24% to $8.81 billion.
Excluding a gain of $1.96 per share from the spinoff of Dow Chlorine Products, the company earned 93 cents/share, handily beating the average analyst estimate of 70 cents, according to Thomson Reuters I/B/E/S.
(Reporting by Amrutha Gayathri in Bengaluru; Editing by Anil D'Silva)
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