Dow exec talks merger, $400 million Michigan investment

The European Commission on March 27 granted conditional approval of the $130 billion merger between The Dow Chemical Co. and DuPont, and on Thursday a Dow executive said the companies are getting closer to a deal.

Announced in late 2015, the merger would combine two of the biggest chemical companies in the country. It still needs regulatory approval in the U.S., China, Brazil and India.

“Since that has happened,” Dow’s Chief Operating Officer Jim Fitterling told the Daily News on Thursday, referring to European approval, “we’ve seen positive movement in the other jurisdictions and have obtained additional approvals. We anticipate closure no earlier than the first of August.”

Dow announced in late March that it expects the Midland-based Material Sciences company to be the first spin-off, but that it would remain headquartered in the city. The merger would create DowDuPont, which would spin off into three independent publicly traded companies within 18 months: Material Sciences, and Agriculture and Specialty Products, to be based in Wilmington, Delaware.

Over the next decade, Dow says it plans to invest $400 million in its Michigan operations. The company has support in a $61.4 million tax credit from the Michigan Economic Development Corp. The credit dictates that Dow must create 1,700 jobs by 2025.

Original terms stated Dow must create 1,700 jobs in the 12th of the 15-year tax credit, but the MEDC this week agreed to give Dow the full 15 years to hit the mark. (Read that story at http://bit.ly/2q9IE5U)

When asked, neither Fitterling nor a company spokesperson confirmed Dow’s status on its job creation requirement.

“I do not have a specific number for headcount increases,” Fitterling said. “We do anticipate some increases to come in R&D personnel. I would hope that some would come in manufacturing-oriented jobs in the region.”

Dow Chairman and CEO Andrew Liveris, at an event in Grand Rapids alongside then-President-elect Donald Trump in late 2016, announced that Dow plans to build a new innovation center in Midland. Dow has not stated a potential location in the city, the size of the facility and a timeline for which it could be built, investment amounts, or whether hiring preference will be given to Great Lakes Bay Region and Michigan residents.

But, Liveris previously said, the plan would create 100 jobs in Michigan and bring another 100 to Midland from other global Dow facilities.

Fitterling said Dow will continue to put R&D capabilities in Midland with a focus on infrastructure and building technologies to produce energy savings designs for buildings, and home and personal care products.

And as automakers move to hybrid, electric and other means, “we need to keep up with them in terms of research capability.”

“There are 1,200 researchers and developers that are already in Midland,” Fitterling said.

Michigan is a big part of Dow’s history and future, he said, and the company wants to position its manufacturing sites in the state and look at new investments.

However the company may not be immune to more bumps in the road related to the merger, as Fitterling said Dow could look into consolidation of some of its small sites.

At its current site on East Patrick Road, Dow is building a new six-story corporate headquarters. Fitterling said the building will be 40 percent more energy efficient than others on the Dow campus and will have space for about 475 employees, which will start moving in by July. The Midland Zoning Board of Appeals in February approved variances for Dow to build a new visitor center and covered walkway as part of the new headquarters. Read that story at http://bit.ly/2ppps6C

Dow reported first quarter earnings on Thursday. Read that story at http://bit.ly/2qiPB47