It seem like just last month that DowDuPont(DWDP) completed the spinoff of Dow(DOW). As was planned from the moment Dow and DuPont merged just a few short years ago, DowDuPont has one more spinoff to complete before it changes its name back to DuPont(or DuPont de Nemours, Inc., to be precise), and its ticker back to DD.
DowDuPont’s board has approved the spinoff transaction. On June 1, DowDuPont shareholders will receive one share of Corteva stock for every 3 shares of DowDuPont stock owned. Immediately afterwards , DowDuPont will, subject to shareholder approval, implement a reverse stock split in which DowDuPont shareholders will receive one share of new DowDuPont stock for every three shares of DowDuPont stock owned. DowDuPont will then change its name as stated above, doing business as DuPont.
Corteva will be a pure-play agriscience company, combining the agriculture assets from the former Dow and DuPont. Corteva stock will trade under the CTVA ticker on the NYSE. When-issued trading will begin on May 24, with regular way trading commencing on June 3. The company’s Form 10 has been declared effective, and can be found here. Both DowDuPont CEO Ed Breen and Corteva CEO James Collins shared the requisite excitement about the transaction.
“Today’s announcement marks a major milestone toward successfully separating Corteva on June 1,” said Ed Breen, chief executive officer of DowDuPont. “We believe Corteva is set to be a leading pure-play agriculture company with a balanced portfolio and robust innovation pipeline that will drive long-term value for shareholders.”
“This milestone marks the completion of all the regulatory requirements for us to separate into a leading pure-play independent agriculture company on June 1st. Corteva Agriscience is well positioned to drive long-term value for shareholders as we leverage our balanced portfolio and robust innovation pipeline to deliver the complete solution farmers need to maximize yield and profitability,” said James C. Collins Jr., Corteva’s Chief Executive Officer.
As we have discussed, there has been a great deal of shuffling of assets here as Ed Breen combined two companies with the express intention of creating three. As was the case with Tyco, which Breen also broke into three companies, we may well see follow-up spinoffs from the surviving companies. It is also worth noting that even prior to the Dow-DuPont merger, DuPont spun off Chemours(CC). We were very skeptical about its prospects as it looked to be a classic example of a bad asset spin, but, so far, investors have been richly rewarded. Sometimes even bad assets catch a break.
Disclosure: The author holds no position in any stock mentioned