Talks were reportedly triggered by falling crop prices and rising fertilizer costs. Less than a week ago, Dow Chemical Co. announced a review of its farm chemicals and seeds unit after reporting falling sales for nearly a year.
The Reuters report says, “Falling crop prices and rising fertilizer output have triggered consolidation among farm-focused companies. ‘Everyone is talking to everyone,’ Dow Chief Executive Andrew Liveris said on a conference call.”
This comes in the wake of Monsanto’s failed bid for acquisition of rival Syngenta AG.
While some in the business world have speculated that DuPont is a potential buyer of Dow’s farm unit, others question whether the company is in a position to do so. DuPont is already targeting about $1.6 billion in annual savings by 2017 and expects 2015 sales to fall by 11 to 12 percent.
Breen indicated DuPont would take a “fresh look” at cost structure and capital allocations. About 60 percent of DuPont’s sales are generated outside North America. FG
