Dow, DuPont, see Tax Benefits in Merger

Industry experts say the tax-free treatment of the spin-offs is one of the driving factors in the Dow DuPont Merger. Reuters reports typically companies that have been through a change of control are liable to pay capital gains taxes on subsequent spin-offs. If both companies, however, do not formally undergo a change of control, the spin-offs can be tax-free. Following the merger, Dow and DuPont expect to create three publicly-traded businesses, focusing on agriculture, materials and specialty products. Meanwhile, the Alliance of Critical Syngenta-shareholders expressed concern with Syngenta’s current board amidst the merger talks in the market. The shareholders said following the Dow DuPont merger announcement, “with that combined company executing its own integrated strategy, Syngenta must quickly find a path that allows it to compete.” The group urged the company to “engage in meaningful dialogue with all interested suitors.”