Dow AgroSciences Signals Potential Sale
26 October 2015 Dow AgroSciences, which reported struggling third-quarter sales last week, signaled that it is exploring a potential sale of the company.
“The company will review all options with a best-owner mindset, with a focus on creating new synergies in a consolidating agricultural market. The company is considering only those prospects that will extract further value from this highly attractive and well-positioned business and return significant value to its shareholders, and will compare those options to that of the value created by retaining the business,” Dow said in a statement.
The Indianapolis, Indiana-based business reported third-quarter sales of $1.2 billion, down from $1.4 billion in the year-ago period. Lower crop commodity prices in Latin America, high channel inventories, and significant currency headwinds all hurt the business.
Additionally, Dow announced that it expects to accelerate its three-year, $5 billion share buyback tranche – repurchasing $1 billion of shares in the fourth quarter, and the remaining $2 billion in 2016. Once completed, Dow will have executed $9.5 billion in share repurchases since 2013.
Separately, Dow reorganized its executive leadership team and their responsibilities. “These changes were made in order to maintain the company’s aggressive focus on executing against its strategic priorities, continuing to deliver sustainable earnings growth and increasingly reward shareholders,” it said.
- James (Jim) R. Fitterling has been appointed Vice Chairman and Chief Operating Officer. In this capacity, he will have accountability for all of Dow’s businesses except Dow AgroSciences, Operations including Environment, Health & Safety and Sustainability, Manufacturing and Engineering, and Supply Chain, as well as Research & Development.
- Howard I. Ungerleider has added the position of Vice Chairman to his existing role as Chief Financial Officer. He will also assume responsibility for leading Dow AgroSciences. Dow’s Corporate Strategy Development, Corporate Planning, Finance, Information Technology & Business Services functions will also now report to Ungerleider.
Fitterling and Ungerleider will report to Dow Chairman and CEO Andrew N. Liveris and together form a new Office of the Chairman and CEO. Torsten Kraef, Corporate Vice President of Strategy Development, will serve as secretary to the newly announced office.
Fitterling’s focus will be on day-to-day operations, while Ungerleider will be responsible for key portfolio and strategic initiatives. Both will work closely with Liveris.
Additionally Fitterling will join the Sadara Board, and Ungerleider will chair the Dow AgroSciences Members Committee.
In a related move, Joe E. Harlan, Vice Chair and Chief Commercial Officer for Dow, will add Latin America to his existing geographic responsibilities of North America and Asia Pacific, and relocate to Chicago. He will remain on the Board of Dow Corning, and a member of the Dow AgroSciences Members Committee.
The Office of the CEO team has also been restructured and renamed as the Executive Leadership Council. It will be comprised of all key C-suite leaders, including the members of the newly formed Office of the Chairman and CEO, and the Heads of Legal, Human Resources, Global Public Affairs and Government Affairs, R&D, Manufacturing, Strategy, the leader of EMEAI, as well as Joe Harlan in his new role.
“Today’s announcements further illustrate the strength of Dow’s financial position, and our unwavering commitment to consistently and increasingly reward shareholders,” said Andrew N. Liveris, Dow’s chairman and chief executive officer. “Over the last several years, we have built a solid foundation of increasing earnings performance, and have repositioned our enterprise. For 12 consecutive quarters we have delivered increasing earnings performance and now have a portfolio that is built to deliver in a variety of macroeconomic conditions – supported by a foundation of Dow-specific value drivers that offer competitive advantages. With today’s announcements on our goals for the next period, we will continue to demonstrate our commitment to being exceptional stewards of the opportunities at hand – yielding increasing value to our shareholders in both the near- and the long-term.”
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