Dow Chemical and DuPont merger update
On August 4, 2017, Dow Chemical (DOW) and DuPont (DD) announced that the merger will close on August 31, 2017. According to the press release, Dow Chemical and DuPont said that they received all of the required regulatory approvals. All of the merger conditions have been satisfied. Dow Chemical and DuPont stock will stop trading after the close on August 31, 2017. Effective from September 1, 2017, DowDuPont will trade under the ticker “DWDP” on the NYSE.
Dow and DuPont expect that they can carry out the intended spin-offs to take place within 18-months from the merger’s closing date. The combined market cap of these two companies is close to $150 billion. DuPont and Dow Chemical announced strong 2Q17 earnings.
Dow Chemical’s stock performance
Dow Chemical had a bad week. Its stock fell 2.4% for the week and closed at $64.11. Despite the stock’s fall, Dow Chemical managed to trade marginally above the 100-day moving average price of $63.48. On a year-to-date basis, the stock has returned 12.0%. Dow Chemical’s relative strength index of 44 indicates that the stock isn’t overbought or oversold. An RSI above 70 indicates that the stock is overbought, while a score below 30 indicates that the stock is oversold. Dow Chemicals’ 52-week low was $51.57, while its 52-week high was $64.16.
Investors can hold Dow Chemical indirectly by investing in the iShares U.S. Basic Materials ETF (IYM). IYM has invested 12.0% of its portfolio in Dow Chemical. The fund’s other holdings include Monsanto (MON) and Praxair (PX) with weights of 8.60% and 6.20%, respectively, as of August 4, 2017.